Why IPOs deserve a strategy IPOs can deliver quick pop—or painful whipsaw. A repeatable process beats hype. Your edge: disciplined research, sensible position sizing, and a clear post-listing plan. IPO types & basics (India) Mainboard vs SME: Mainboard offers higher liquidity and analyst coverage; SME IPOs can be riskier with tighter floats. Investor categories: Retail (≤ ₹2 lakh per application), S-HNI (₹2–10L), B-HNI (> ₹10L), QIBs, NIIs. Price band & lots: Apply at cut-off to avoid price-miss in book builds. Money flow: ASBA/UPI block; refund if not allotted. The Research Framework (before you apply) Business quality Industry structure (growing? cyclical?), market share, moat (brand, cost, network). Financials 3–5 year revenue/PAT CAGR, margins, cash flow, ROCE/ROE, debt levels. Use of proceeds Growth capex, debt repayment, or OFS (promoters selling). Growth + deleveraging > pure OFS. Valuation vs peers P/E, EV/EBITDA, P/B (for lenders), per-branch/per-subscriber/unit economics. Governance & risk Promoter history, related-party transactions, customer concentration, regulatory exposure. Issue structure Fresh vs OFS mix, anchor book quality, pre-IPO investor lock-ins. Red flags: deteriorating margins, aggressive peer valuation premium, high OFS %, negative operating cash flows, complex group structures. Sizing & application strategy Position sizing: Treat an IPO like any new stock idea; cap at 1–3% of equity portfolio per name. Retail applications: One application per PAN. You may apply through family members with separate PAN/Demat to increase probability. Price choice: Use cut-off in book-built issues; in fixed-price issues, price is predetermined. SME caution: Lower float can inflate subscriptions and volatility—size smaller than mainboard. Reading the subscription data (smartly) Day 1 vs final hours: Institutions (QIB) often come late; a surge in the last 2–3 hours can re-rate expectations. Balanced bid quality: Healthy demand across QIB + NII + Retail is stronger than retail-only frenzy. HNI leverage risk: Very high NII books can unwind on listing if sentiment cools. Anchor book: Blue-chip anchors at the upper band can signal confidence—but are not guarantees. Grey Market Premium (GMP): treat as sentiment, not signal Useful to gauge mood; not a valuation tool. GMP swings with market indices and liquidity. Do not base allocation solely on GMP screenshots. Listing-day playbook (decide before listing) Choose one of three paths and predefine triggers: List & Exit (momentum flip) If objective was pop only. Exit on open or first 15–30 mins if price is ≥ your target multiple (e.g., 10–20% above issue). Guardrail: Hard stop if breaks issue price decisively on volume. Partial Exit, Partial Hold Book 30–50% gains on listing strength; hold the rest with a closing basis stop at issue price or 10–12% below VWAP. Long-term Hold Hold only if fundamental thesis is strong and valuation is reasonable. Use post-listing results (first 2 quarters) as checkpoints to add/trim. Worked examples (illustrative) Example A: Mainboard consumer company Band ₹250–265; you apply at cut-off for 1 lot. Final subscription: QIB 22×, NII 35×, Retail 9×; strong anchors. Listing at ₹310 (+17%). Strategy: Partial exit 50% near open; trail stop for remainder at issue price on a closing basis. Example B: SME specialty chemicals Band ₹100–105; NII book 150×; low float. GMP jumps pre-listing but market weak. Strategy: Shrink size to half your normal exposure; if open < ₹105, exit promptly—don’t average down in illiquid SME names. (Examples are for education; verify live data.) Post-listing evaluation (avoid anchoring) Compare listed valuation vs peers after the first stabilizing week. Track delivery volumes, not just intraday churn. Watch promoter pledges, insider sales, and research coverage initiation notes. Taxes & costs (quick recap) Equity taxation: STCG (≤12 months) currently 15%; LTCG (>12 months) 10% over threshold. Charges: Brokerage + STT + stamp duty + GST + exchange fees—account for these in net returns. (Tax rules can change; check current slabs.) IPO Checklist (copy/pin) Prospectus skim (business, risks, use of proceeds). Peer comp table and sanity valuation. Subscription trend & anchor quality. Position size set; cut-off selected. Listing-day plan written (exit/hold triggers). Review after Q1/Q2 results. FAQs Should I apply only when GMP is high? No. Treat GMP as noise. Base decisions on business quality + valuation + book build strength. Is SME IPO allocation worth it? Sometimes, but risks are higher—size smaller, be strict with stops, and reassess after first results. Can I improve allotment odds legally? Apply via eligible family PANs (independent Demat/UPI). Multiple apps from the same PAN are not allowed. Bottom line Winning IPO strategy = quality filter + sensible sizing + prewritten listing plan. Skip the hype cycle, let process drive decisions, and review each outcome to keep improving. Disclosure: Educational content only, not investment advice. Market regulations, taxes, and contract details may change—confirm current rules with your broker.