IPO (Initial Public Offering) provides a great opportunity for investors in the Indian stock market to invest in the initial public round of companies. Through IPO, a private company makes its shares public, allowing investors to become a part of those companies.
In 2025, many big companies in India are ready for IPO, and there is no dearth of investment opportunities in the market. But investing in IPO is not as simple as it looks. It requires the right information, caution and a strategic approach. In this guide, we are going to tell you how to invest in IPO in India in 2025, what are its benefits, what are the risks and what to keep in mind while investing.
What is an IPO?
IPO (Initial Public Offering) is the process when a company offers its shares to the general public for the first time to make its partnership public. Once the investment is made in the IPO, the shares of that company are traded on the stock exchange such as NSE (National Stock Exchange) or BSE (Bombay Stock Exchange).
Before IPO, companies are financed only by a few private investors or early investors. When they go public through IPO, they receive capital from a large number of investors and this gives them an opportunity to use it to expand their business.
Why do companies bring IPO?
Companies raise capital through IPO for various reasons
Business expansion: The company wants to enter new markets to expand its products and services.
To repay debt: A part of the amount raised from the IPO can be used by the company to repay its old debts.
Acquisitions: Companies can use the capital raised from IPOs to acquire other companies.
Public Recognition: Bringing an IPO increases the brand value and identity of the company, which creates trust among customers and investors.
How to Invest in IPO? – Step-by-Step Guide
1. Open Demat and Trading Account
The first requirement to invest in IPO is Demat and Trading Account. Demat account is the account in which all the shares you have purchased are deposited in digital form. Trading account is the account through which you buy and sell shares.
To open these, you can choose broker platforms like Zerodha, Upstox, Groww, Angel One.
2. Get information about IPO
In India, companies organize IPOs through BSE or NSE. You can check the list of upcoming IPOs on these websites or on broker platforms. Apart from this, IPO details like DRHP (Draft Red Herring Prospectus) gives complete information about the company’s financial figures, future plans and risks.
3. Apply for IPO
There are many ways to apply for IPO:
UPI (Unified Payments Interface): This is a new method, in which you can apply through UPI through your broker apps. You have to link UPI ID, and a penny is blocked for the application.
ASBA (Application Supported by Blocked Amount): This is done through net banking. After applying in this, the application amount is blocked in your bank account and the amount is returned after the IPO allotment process.
4. Check IPO Allotment
After the last date of IPO, the allotment of IPO is usually decided within 7 days. To check this, you have to visit the website of the broker or registrar (Link Intime or KFin Technologies) and check your allotment status by PAN number.
5. Listing and trading of IPO shares
If you get shares allotted in the IPO, they will be credited to your Demat account. After this, you can sell these shares on the day of listing in the stock market. After the IPO is listed, you can sell them through trading platforms (like Zerodha, Upstox).
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Major IPOs of 2025
Some major companies are expected to come up with IPOs in 2025, some of which have already announced.
Reliance Jio: This IPO can be around ₹40,000 crores. Reliance Jio’s IPO can prove to be a big event in the Indian market.
OYO: Apart from food delivery, OYO is a big name in the hotel industry and the IPO of this company can also be seen in 2025.
Mobikwik and Swiggy: Both these companies are growing rapidly and may plan to bring their IPO next year.
Benefits of IPO
Investment at cheap price: One advantage of investing in IPO is that you get a chance to buy shares at initial prices.
Potential for profit: A good premium can be obtained after the IPO is listed in the stock market.
Long term returns: Good IPOs can give high returns to investors in the long term.
SEBI monitoring: IPO companies are listed under the supervision of SEBI (Securities and Exchange Board of India), which provides protection to investors.
Risks in IPO
Loss on listing: IPO shares may suffer losses on the day of listing if the market conditions are not right.
Company performance: Sometimes companies fail to report their performance correctly and their stock price may fall.
Not getting allotment: When IPOs are oversubscribed, you may not get share allotment.
Wash trading: Some companies may manipulate their share prices after the IPO, which may lead to losses.
Investment tips
Read the DRHP carefully: Read the DRHP to understand the company’s financial position and risks.
Smart diversification: Spread your investments across sectors to reduce risk.
Consider GMP as an indication only: Take the Grey Market Premium (GMP) as an indication only, not a decisive criterion.
Long term investment: Long term investments in good IPOs can give good returns.
Conclusion
Investing in IPOs in 2025 can be a profitable opportunity, provided you invest with complete information. If you invest in IPO in the right way and keep the risk in mind, it can give you better returns. With this guide in mind, you can make your investment decisions more wisely.