How to Evaluate an IPO: 7 Essential Metrics Every Retail Investor Must Check in the DRHP

1. Introduction: Beyond the Hype and Grey Market Buzz

The only reliable foundation for IPO evaluation is the issuer's statutory regulatory document: the Draft Red Herring Prospectus (DRHP) filed with SEBI.

In this masterclass, we break down the seven critical financial and structural metrics you must inspect before applying for any Mainboard or SME IPO in India.

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2. Metric 1: Fresh Issue vs. Offer for Sale (OFS)

Fresh Issue: Proceeds go directly into company reserves for Capex or debt reduction.

OFS: Proceeds go to exiting promoters or PE funds. A high fresh-issue component (>60%) indicates capital for expansion.

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3. Metric 2: Valuation Multiples

Always compare post-issue P/E and EV/EBITDA against peer benchmarks to ensure you are not buying at unsustainable valuation peaks.