By Venkatachalam Shunmugam

India’s initial public offer or IPO market is booming. For many retail investors, it’s challenging to decide whether to apply, avoid, or observe. The answer isn’t found in market noise. It’s in asking smart questions—and doing a few simple calculations—before risking your savings, says Venkatachalam Shunmugam.

Where is my money actually going?

Every IPO splits into two buckets.

Fresh Issue: The company receives new money to expand, repay debt, or invest in technology.

Offer for Sale (OFS): Existing shareholders—founders, venture funds, or private investors—are selling their stake. This money doesn’t go to the company; it goes to them.

If most of an IPO is OFS, you’re financing someone’s exit, not the company’s growth. Check the prospectus—available for fr

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