10.28Practical IPO evaluation checklist
1What is it?
Answer these before applying.
2Why does it exist?
A checklist cuts through hype and GMP noise.
3Diagram
| # | Question | Your answer |
|---|---|---|
| 1 | Can I explain the business in 2 sentences? | Yes / No |
| 2 | Revenue and profit growing steadily for 3 years? | |
| 3 | Positive operating cash flow? | |
| 4 | Debt manageable (D/E < 1)? | |
| 5 | How much is fresh issue vs OFS? | |
| 6 | Clean promoter record; promoter holding after IPO? | |
| 7 | IPO P/E vs listed peers? | |
| 8 | Industry growing; company gaining share? | |
| 9 | Top 10 risk factors acceptable? | |
| 10 | Would I buy this at this price if it were already listed? | |
| 11 | Am I ignoring GMP and hype? |
4Quick revision
- Business, numbers, valuation, promoters, risks.
- Ignore GMP.
- Would you buy it if it were already listed?
5Knowledge check
Q1. The single most useful question?Show answer
Would I buy this at this price if it were already listed?
Q2. Should GMP be on your checklist?Show answer
Only as noise to ignore.
Q3. Why check fresh issue vs OFS?Show answer
To know if money goes into the company.
See it live on MojoStox