In the stock market, few events draw as much attention as an IPO. It marks a company’s entry into the public market and often offers early investors the chance to cash in on perceived growth potential.

For retail investors, IPOs offer:

• Early entry into potential high-growth companies
• Short-term listing gains
• A sense of participation in popular or consumer-focused brands

From Zomato to LIC, the recent IPO landscape has shown how strong the hype can be — and how unpredictable the outcomes are.

Adding to the frenzy is the rise of investment apps and fintech platforms that allow investors — even those from small towns — to apply from their smartphones in minutes. IPOs are no longer exclusive to large institutions or city traders.

FOMO is not just a buzzword — it's a psychological driver rooted in social proof, peer validation, and the fear of regret. When everyone around you seems to be making quick profits, sitting on the sidelines feels like missing out.

This mindset is especially common in bull markets, when optimism is high and caution is often mistaken for weakness. But IPO investing based on emotion rather than analysis is a classic mistake new investors make.

The rush to act — often triggered by headlines, influencers, or WhatsApp forwards — creates a false sense of urgency. You begin to believe that if you don’t apply, you’ll miss a rare opportunity. In truth, opportunities are never scarce in a market as dynamic as India’s.

Before jumping into an IPO, it's important to understand how the process works:

1. Draft Red Herring Prospectus (DRHP) is filed with SEBI, giving details of the company.
2. Price Band is announced.
3. Bidding Window opens (typically for 3 working days).
4. Allotment happens based on demand.
5. Listing Day follows, where the stock gets listed on exchanges like NSE and BSE.

Pro Tip: IPO applications can be done effortlessly through platforms like Arham Wealth, where you can apply online in minutes with a paperless KYC process and simple interface.

Also Read: How to Open Demat Account with Arham Wealth?

Some IPOs indeed live up to their promise. IRCTC, Dixon Technologies, and TCS (back in the day) delivered both listing gains and long-term returns. Factors that contribute to successful IPOs include:

• A strong business model
• Reasonable pricing
• Market-friendly timing
• Use of funds for expansion rather than exits

In such cases, joining the IPO bandwagon early can be rewarding — provided you’ve done your homework.

Successful IPOs tend to reflect companies with clear profitability, robust demand in their industry, and strong fundamentals. They’re backed by a vision, not just valuation.

Unfortunately, for every success story, there’s a cautionary tale:

• Paytm saw a sharp decline post-listing, disappointing investors who bought into the hype.
• Reliance Power’s infamous IPO in 2008 caused heavy losses and became a case study in IPO caution.

Here are some reasons IPOs can go wrong:

• Overvaluation: Companies price their shares too high.
• Speculative Demand: Driven by short-term traders, not real investors.
• Unprofitable Businesses: Many tech IPOs promise future profits but show little financial strength now.
• Exit Strategy for Existing Investors: If the IPO is more about existing investors cashing out than company growth, beware.

When greed overtakes analysis, IPO investing becomes gambling. Long-term gains require long-term thinking.

Yes, sometimes waiting is smarter. Post-listing, prices often settle and reflect a more accurate valuation. Buying after the IPO can:

• Let you assess real market sentiment
• Provide better entry points
• Reduce volatility risk

While the first-day pop may seem exciting, many successful investors prefer to wait. They observe the price trend, financial performance, and management clarity before committing funds. It’s a practice aligned with long-term vs. short-term investing strategies.

For long-term investors building wealth strategically, patience can offer stronger returns than hype-driven entries.

Here’s how to manage the fear and invest with logic:

1. Read the DRHP

Get into the company’s business, financials, risks, and plans. Avoid relying solely on social media.

2. Define Your Goal

Are you investing for quick gains or long-term growth? This defines your strategy.

3. Watch for Valuation Red Flags

Compare with listed peers and check P/E ratios, growth rates, and debt levels.

4. Stay Diversified

Don’t pour all your funds into IPOs. Balance across sectors and investment types for better portfolio diversification.

5. Don’t Chase the Crowd

Remember, popularity doesn't equal profitability. Avoid decisions based on peer pressure or influencer hype.

When in doubt, consult professionals. Platforms like Arham Wealth also offer insights and research-backed content to help you make informed choices.

Digital transformation, financial awareness, and mobile-first platforms have led to a significant increase in retail participation from Tier 2 and 3 cities.

Platforms like Arham Wealth make it easy for first-time investors across Bharat to understand, evaluate, and apply for IPOs seamlessly. With growing interest outside metros, this shift is shaping the new face of Indian capital markets.

This also signifies a major trend in democratizing access to financial growth. No longer limited to a select few, IPO participation is now part of a larger narrative of financial empowerment across India.

IPO investing isn't inherently good or bad. It depends on the offer, your goals, and your strategy.

Ride the hype only when:

• You’ve done your research
• Valuations are fair
• You’re prepared for short-term volatility

Wait it out when:

• The IPO looks overhyped
• Valuation is stretched
• Your goal is sustainable, long-term growth

No matter what path you choose, ensure your decisions are informed. Don’t fall for fear. Follow fundamentals.

And when you’re ready to take the first step, whether it's IPO investing or general stock market participation, Open a Demat Account with Arham Wealth — and make investing smarter, not emotional.