IPO (Initial Public Offerings ) – Good or Bad?

An initial public offering (IPO) is the first sale of stock by a company to the public. It's hard enough to analyze the stock of an established company. An IPO company is even trickier to analyze since there won't be a lot of historical information however you can always check CRISIL IPO Grading.


CRISIL IPO Grading is designed to provide investors an independent, reliable and consistent assessment of the fundamentals of new public issues. It includes an assessment of business and financial prospects, management quality and corporate governance.

IPO may be good in you stay invested for a long time horizon. Also check Lock-in period and Flipping rules of IPO. Flipping is reselling a hot IPO stock in the first few days to earn a quick profit.

Be careful before jumping into IPO, because investing is not just about doubling your money but its about multiplying your money and you can’t multiply your money in the stock market without investing for a long time horizon say 10,15 or 20 years or even more…

See Standard & Poor’s CRISIL IPO Ratings before investing in any IPOs.

CRISIL IPO Grading Scale–

5/5 – Strong Fundamentals

4/5 – Above Average Fundamentals

3/5 – Average Fundamentals

2/5 – Below Average Fundamentals

1/5 – Poor Fundamentals

• Invest in IPOs only if you think that the company is fundamentally strong and you are willing to stay invested for a long time horizon (> 5 years)
• Check the CRISIL IPO rating before investing
• CRISIL IPO Grade 3 or more is the good indicator to invest in IPO.
• Most of the government PSUs have 4+ CRISIL grading.