Is the Indian IPO market a Scam? Discover how high valuations and hype are fooling retail investors. Read our deep dive on Lenskart, BluSmart, and falling listing gains. Decoding The Great Indian IPO Scam.

Infloia’s Exclusive

Author: Jimmey Barnwal  |  November 26, 2025 |  10 min. read

India’s IPO market has exploded in volume since 2021, but the easy “double-your-money-on-listing” days are fading. Average listing-day gains that hovered around ~30% in recent years have compressed sharply — into single digits for much of 2025 — and many new listings now open flat or fall. That shift forces retail investors to stop treating IPOs like guaranteed windfalls and start treating them like business investments: read the numbers, understand the valuation, check unit economics and promoter intent, and ignore hype and tips. (I’m not a financial adviser; this is an evidence-based framework to help you decide).

1. What is an IPO — the simple mechanics

An IPO (Initial Public Offering) is the first time a company offers shares to the public. Practically, there are two things an IPO can be:

• Fresh issue — the company issues new shares and receives the cash to grow the business (expansion, capex, R&D).
• Offer For Sale (OFS) — existing shareholders (promoters or early investors) sell part of their stake; the company gets no new cash — the proceeds go to sellers.

The distinction matters because a fresh issue can fund growth that increases the intrinsic value of the business; OFS is often an exit or partial exit for early backers. Savvy investors treat these differently when assessing whether the IPO capital will help future profits. Groww+1

2. The Big Picture: Listing Gains Are Falling in Indian IPO!

For the past 3 years, India has witnessed an IPO frenzy. Everyone — from first-time investors to seasoned traders — believed that IPOs were the fastest way to “multiply money.” For a while, this actually worked. But every bubble creates a false sense of safety right before it bursts.

And now, the data is screaming something no one wants to admit:

The easy-money era is over. The IPO market is cooling — fast.

Here’s what the numbers reveal:

• 2021 – Average listing gains: ~30%
• 2022 – Average listing gains: 25–28%
• 2023 – Average listing gains: ~28–30%
• 2024 – Average listing gains: ~29–30%
• 2025 (so far) – Average listing gains: 8%… and falling every month
• Only 15% of IPOs delivered more than 25% listing gains, compared to 41% in 2024.

These numbers are not random. They mark a structural shift.

What does this mean for the average retail investor?

It means this:

The “IPO will always make money” mindset is dead.
The market has changed but retail investors haven’t.

And that’s exactly where the danger is.

This fall in listing gains is not just a statistic — it’s a signal.
Signals like these always appear right before a major market correction.

When gains compress from 30% to 8%, it tells you:

• IPOs are being overpriced.
• Retail demand is weakening.
• Smart money is exiting early.
• Oversubscriptions don’t mean quality anymore.
• Hype is replacing fundamentals.

And when valuation excess meets investor blindness, bubbles don’t burst — they explode.

Investors who blindly apply for every IPO today are not “playing safe.”
They are walking into a field where the mines are already planted.

The ones who survive the next phase will be those who stop chasing hype and start analyzing businesses.

 

3. Why Listing Gains Are Falling

Most people think the IPO market is slowing.

The truth?

**It’s not slowing.

It’s resetting.
And only the smartest investors will survive the reset.**

Here’s the full picture — expanded with deeper insights.

A. IPOs Are Being Aggressively Overpriced

Companies today are pricing IPOs based on future dreams, not present performance.

Promoters know:

• Retail demand is high
• Social media hype works
• News headlines create artificial scarcity
• Oversubscription creates FOMO

So they price their shares at:

• 80x earnings
• 120x earnings
• 200x earnings
• Sometimes infinite (loss-making companies)

At these valuations, even a small miss in performance causes the stock to collapse.

The bubble isn’t visible on the chart,
but it’s visible in the P/E ratio.

B. Hype Is Replacing Fundamentals

Shark Tank appearances.
Celebrities investing.
Founder interviews.
Aggressive PR campaigns.
Pre-IPO media blitz.

Companies today spend crores crafting image and perception — because perception sells.

But the stock market doesn’t pay for perception.
It pays for earnings.

When perception is high and earnings are low, the bubble grows silently.

Retail investors fall into the trap because PR gives them confidence.

Confidence without analysis is how people lose money in markets.

C. Too Many IPOs in Too Little Time

2024–25 saw one of the highest IPO frequencies in Indian history.

When too many companies rush to the market:

• Capital spreads thin
• Investor fatigue increases
• Demand quality declines
• Only the strongest get sustainable gains

Think of it like this:

If 3 shops open in your area, they do well.
If 50 shops open, someone will shut down.

Similarly, too many IPOs dilute the opportunity.

D. Institutional Investors Are Exiting, Retail Is Entering

Here’s the scariest part:

Most big investors are using IPOs as an exit,
while retail investors are using IPOs as an entry.

This is the exact opposite of how wealth is built.

Funds enter in early rounds.
Funds exit in IPOs.

Retail enters at the top of the valuation pyramid.

This imbalance is the reason why listing gains are falling — retail is coming in when smart money is walking out.

E. Retail Investors Still Think IPO = Profit

This is the biggest reason the crash hasn’t fully happened yet.

As long as retail believes:

• “IPO always gives profit”
• “Brand name means safe”
• “GMP means guaranteed listing gain”
• “Oversubscription means quality”
• “If I don’t apply now, I’ll miss out forever”

…companies will continue to aggressively overprice shares.

But belief doesn’t protect money.
Analysis does.

And analysis is what most retail investors avoid.

4. Common Traps Retail Investors Fall Into — And Why They’re Deadly in 2025

Most retail investors are not losing money because of the market.
They’re losing money because of behavioral traps — mental shortcuts that destroy portfolios.

Here are the biggest traps — expanded in detail, with the real psychological manipulation behind them.

Trap 1: “Oversubscription = Guaranteed Profit”

100x oversubscription looks like a jackpot.

But here’s the dark truth:

Oversubscription measures demand…
not quality. Not valuation. Not profitability.

Most oversubscriptions come from:

• QIB (large funds) parking short-term money
• Algorithm-based bidding
• Influencer hype
• Market maker manipulation
• Grey market momentum chases

Oversubscription creates illusory safety, making retail investors think:

“So many people applied… surely this must be good.”

No.
Crowds don’t think.
Crowds react.

Scarcity mindset makes people chase what others chase — even if they don’t understand it.

This trap creates more casualties than crashes.

Trap 2: “Brand name = Safe IPO”

This is the most dangerous illusion.

People see names like Tata, Bajaj, Swiggy, Mamaearth, Zomato and think:

“I know this brand. It must be valuable.”

But brands don’t guarantee returns.
Numbers do.

Tata Capital listed flat.
Hyundai India IPO underperformed expectations.
Many well-known FMCG brands opened under water.

The brand and the valuation are two separate universes.

Investors who confuse brand love with business value fall into a psychological trap called:

“Familiarity Bias.”

It feels safe…
but takes your money silently.

Trap 3: Chasing GMP (Grey Market Premium)

GMP is treated like divine prophecy.
But here’s what most people don’t know:

GMP can be manipulated.
GMP can evaporate overnight.
GMP does not represent real market demand.

It is often driven by:

• Whales placing artificial buy orders
• Insider circulation
• Beta traders spinning momentum
• Newsroom leaks
• Telegram groups pumping false numbers

GMP is like wind:
It makes noise, it moves fast, but it carries nothing solid.

And yet, retail investors rely on it for investment decisions worth lakhs.

This is not strategy — this is gambling disguised as logic.

Trap 4: “If I didn’t get allotment, I’ll buy on listing day”

This is pure FOMO.
And FOMO has no mercy.

When a stock lists +20%, retail investors rush in because they feel they “missed out.”

This is how people become exit liquidity.

Here’s what actually happens:

1. Early investors exit on listing day.
2. Smart money books profit.
3. Stock spikes briefly.
4. Retail enters at the peak.
5. Stock corrects 15–30% within days.
6. Retail holds the bag.

And then retail investors say:

• “Market is rigged.”
• “IPOs are scams.”
• “I always lose money.”

But it was never the market.
It was the mindset — buying at the moment of maximum euphoria.

That’s the reason I’ve called it: The Most Dangerous Day for Retail Investors.

Trap 5: Listening to “Telegram IPO Gurus”

Telegram groups are filled with:

• Influencers paid to promote IPOs
• Operators running pump & dump
• People with zero skin in the game
• Fake subscription numbers
• Artificial GMP predictions

People depend on them because they want shortcuts.

But shortcuts, in finance, are traps in disguise.

When you outsource thinking, you outsource profits.

Trap 6: Applying With Borrowed Money (Credit Cards/Loans)

You’d be shocked how many people do this.

Stock market + debt =
the fastest path to financial destruction.

When markets are running hot, borrowed money “feels safe.”

When markets turn cold — like they are now — borrowed money becomes a knife.

If the stock falls 10% on listing, your loss is not 10%.
It becomes 15–20% after interest + late fees + short-term liquidation.

In 2025, applying for IPOs with borrowed money is the financial equivalent of crossing a highway blindfolded.

Here’s a couple of Case studies – How does these Companies had made Retail Investors fooled by using these techniques!

1. Lenskart — The Eyewear Giant With a Valuation Nobody Wants to Question

How India’s coolest eyewear brand turned into one of the riskiest IPO valuations of the decade

Lenskart is not just a company — it’s a movement.
Stylish glasses.
Smart branding.
Influencer culture.
Tech-enabled retail.
A charismatic founder.
Shark Tank fame.

It feels like a winner.

But IPOs don’t reward feelings.
They reward fundamentals.

And when you look behind the curtain, Lenskart becomes a masterclass in overvaluation, expectation pressure, and hidden risks retail investors almost never see.

A. The Illusion of Invincibility — Why Retail Believes Lenskart Cannot Fail

Lenskart is a household name.
Everyone knows someone who uses Lenskart products.
The founder is highly respected.
The marketing is world-class.
The retail experience is impressive.

Retail investors make the mistake of thinking:

• “I like the brand, so the business must be solid.”
• “They’re everywhere, so the profits must be huge.”
• “Shark Tank boosted awareness, so valuation must be justified.”

This is familiarity bias — the illusion that popularity equals profitability.

But IPO investing has only one rule:

A great product does NOT automatically make a great stock.

And Lenskart proves this brutally.

B. The Valuation Shock — 200× PAT (and That’s Before Normalizing Numbers)

Analysts expect Lenskart to list at a valuation between:

• ₹75,000 crore and ₹90,000 crore
• With profits that don’t justify even half of that
• Resulting in a PAT multiple of 200× or more

For context:

Company	Industry	P/E (Approx)
Titan Eyewear	Jewellery & eyewear	~75×
Luxottica (Ray-Ban/Oakley)	Global dominant eyewear	~20×
Warby Parker (D2C eyewear)	US listed eyewear	~18×
Lenskart	India eyewear	200×+

Let this sink in:

Lenskart is asking investors to pay 4× the valuation of Titan
and 10× the valuation of Ray-Ban’s parent company (Luxottica).

Is Lenskart really 10× stronger than the world’s biggest eyewear empire?

No.
But the valuation pretends it is.

This is where danger begins.

Here’s the biggest shocker:

Three months before Lenskart’s IPO, founder and CEO Peyush Bansal quietly acquired the company’s shares in a series of transactions that now looks like one of the smartest bets in recent times.

In July 2025, Bansal bought 4.26 crore shares of Lenskart at an average price of Rs 52 per share, spending about Rs 222 crore in total.

Fast forward to the IPO launch, — with the issue priced between Rs 382 and Rs 402 per share, those same shares are now worth nearly Rs 1,717 crore at the upper band.

That means the IIM Bangalore graduate has made an unrealised profit of nearly Rs 1,495 crore in just three months.

Is this justified to Retail investors?

How he can make retail investors fool like this?

C. The Profit Illusion — Why Analysts Don’t Trust Lenskart’s Reported Earnings

Several financial analysts flagged that:

• A portion of Lenskart’s profits came from one-time accounting adjustments
• Including fair-value gains and exceptional items
• Not from its core eyewear operations
• Not from operational efficiency improvements

This means the headline PAT is inflated.

So the real valuation multiple is not 200×.
It could be 300×, 350×, or even 400× once you normalize the earnings.

Imagine paying 400 years of profits upfront.

That is not investing.
That is blind speculation.

D. The Market Saturation Problem — The Growth Ceiling Nobody Talks About

Lenskart has massively penetrated the Indian market.

• Hundreds of stores
• Omni-channel dominance
• High brand recall
• Strong online presence
• Pan-India operational efficiencies

This sounds great… until you realize:

The Indian eyewear market is not large enough to justify explosive future growth.

Data expectations:

• India’s eyewear market CAGR: 5–7%
• Lenskart already dominates organized retail
• Growth from here requires either:
  • Deep entry into rural India (low margins)
  • Heavy offline expansion (costly)
  • International expansion (uncertain)
  • New product categories (risky)

This is a growth-saturation trap:

• When a company becomes big too fast
• Further expansion becomes harder
• Profit growth slows
• But valuation demands high growth
• So expectations become unrealistic

Lenskart is entering this zone.

E. International Expansion — The Most Overrated Growth Story

Lenskart is pushing into:

• Middle East
• Southeast Asia
• Possibly Europe/America in the future

But here’s the truth:

1. Eyewear is a highly competitive global market
   Luxottica, Essilor, Warby Parker, Specsavers — all giants.
2. Margins abroad are thinner
   Competition is much higher.
3. Customer behavior is different
   India’s value market ≠ global premium markets.
4. Localization costs rise
   Logistics, returns, store customization, compliance, labor costs.
5. No guarantee of product-market fit
   Indian brands rarely scale globally at high margins.

International expansion is a hope story,
not a guaranteed revenue story.

F. Manufacturing Strategy — A Strength… But Only If Margins Improve

Lenskart is investing heavily in manufacturing:

• High-tech lens factories
• Robotics-led processes
• Upgraded frame production
• Vertical integration for better control

This is smart.

But manufacturing also:

• Increases capex
• Increases depreciation
• Increases risk
• Requires consistent volume
• Takes years to reflect in profits

It will improve margins eventually…
but not fast enough to justify a 200×–400× valuation today.

G. The Hidden Risk — Dependency on Non-Organic Growth

Lenskart also grows by:

• Acquiring small eyewear companies
• Introducing new product lines
• Expanding aggressively offline
• Subsidizing customer acquisition

But:

• Acquisitions dilute shareholder value
• Offline stores are expensive
• Omni-channel costs balloon rapidly
• CAC increases every year as competition rises
• Repeat purchase cycles for eyewear are slow (12–24 months)

This means:

Growth ≠ Profit.
Revenue ≠ Sustainability.

H. The Shark Tank Effect — How PR Distorts Investment Judgment

Lenskart’s founder became a household name after Shark Tank.

This increased:

• Awareness
• Trust
• “Founder brand value”
• Investor FOMO
• Retail excitement
• Media support

But PR-driven popularity is a trap.

People think:

“If he’s a Shark Tank judge, he must be unstoppable.”

But public markets don’t care about fame.
They care about quarterly earnings.

Retail investors forget that.

I. IPO = Exit Strategy for Early Investors (Not Entry Strategy for Retail)

Lenskart’s cap table contains:

• SoftBank
• Temasek
• PremjiInvest
• KKR
• Kedaara Capital
• TPG Growth

These funds invested early.
They need exits.
IPO is the perfect exit.

And they will exit at the highest valuation possible.

Meaning:

Retail investors will enter at the peak,
while early investors exit at the top.

This is how wealth transfers from retail to institutions.

J. So What Makes Lenskart Dangerous?

You’re not betting on:

• A great brand
• A fast-growing startup
• A visionary founder
• A large retail network

You’re betting on:

• A valuation that assumes near-perfect execution
• A company at the edge of market saturation
• International expansion with uncertain outcomes
• Normalized profits far lower than reported
• Aggressive expectations baked into the price
• Investors exiting through OFS
• A growth story that needs to work flawlessly

This combination is deadly.

K. The Final Scarcity Takeaway (Must-Read)

Lenskart is one of India’s strongest consumer brands —
but also one of its riskiest IPO valuations.

Strong business ≠ strong stock
Strong brand ≠ strong listing
Big valuation ≠ big gains

If listing gains fall short,
retail investors will be holding a stock priced for perfection
in a market that rarely forgives imperfection.

In 2025’s IPO environment,
Lenskart will be the ultimate test of whether retail investors have learned to separate:

• Price from value
• Brand from business
• Emotion from analysis
• Popularity from profitability

Most won’t.

But the ones who do will avoid one of the biggest potential wealth traps of the decade.

2. BluSmart Mobility — India’s Most Hyped EV Startup

The Startup That Became a Symbol of “Great Story, Weak Economics”

BluSmart Mobility is a beautiful idea on paper:

“An all-electric, zero-emission ride-hailing platform that will reduce pollution and transform mobility.”

But the financial reality underneath this story is brutal.

This case study is a masterclass in how futuristic narratives can hide present losses.

A. The Hype Machine: Why BluSmart Became a Media Darling

BluSmart built a compelling narrative:

• 100% EV fleet
• Clean energy vision
• Sustainability-first brand
• Anti-Uber positioning
• Strong founder storytelling
• Massive PR push

Every journalist loved it.
Every EV enthusiast adored it.
Every investor applauded the mission.

But finance doesn’t reward missions.
It rewards math.

And the math here is painful.

B. The Real Business Model — And Why It’s Harder Than It Looks

BluSmart operates a capital-intensive model:

1. Owns the EV fleet

Unlike Uber, which is asset-light, BluSmart is asset-heavy.

Which means:

• Vehicle depreciation
• Maintenance costs
• Battery replacement
• Insurance
• Fleet downtime losses
• High upfront capex

2. Runs charging infrastructure

This is expensive, operationally complex, and slow to scale.

3. Operates in a price-sensitive market

Passengers compare everything to Uber.

4. Pays drivers fixed salaries

While Uber pays drivers per ride.

This means BluSmart has higher fixed costs + lower-margin flexibility.

This is a brutal combination.

C. Unit Economics — The Hidden Monster

BluSmart’s biggest challenge is unit economics.

Their cost per ride is significantly higher than competitors because:

• Electricity & charging time
• Driver salary
• Fleet financing cost
• Maintenance
• Parking & charging infra
• Software and operational costs
• Vehicle depreciation
• Demand variability (peak/off-peak mismatch)

BluSmart earns per ride.
But spends much more per ride.

That means:

The more BluSmart grows, the more money it loses.

This is the opposite of scalable business models.

D. The Biggest Red Flag — Profitability is Nowhere Close

Despite:

• High media coverage
• Environmental branding
• Investor attention
• Strong customer love
• Government incentives

BluSmart struggles with:

• No profitability
• No clear timeline for profit
• No clarity on break-even
• Very high operating costs
• Negative contribution margins
• Weak scalability outside Delhi-NCR & Bangalore

Investors want:

• A profitability roadmap
• Clear margins
• Strong unit economics

BluSmart has:

• Vision
• Branding
• PR
• Growth

But not profits.

And IPOs cannot survive on vision alone.

E. The Valuation Problem — The Bubble Inside the Bubble

Even before IPO, the valuation discussions around BluSmart were aggressive, based on:

• Future EV dominance
• Monetization potential
• Charging infra ambition
• Fleet expansion
• ESG investor appetite

But valuation must match:

• Present profitability
• Scalable margins
• Realistic expenses
• Long-term sustainability

BluSmart’s current economics cannot justify a high valuation without assuming:

• 5× revenue growth
• Massive drops in EV prices
• High driver utilization
• Falling electricity costs
• Improved unit margins

These assumptions are optimistic at best, dangerous at worst.

F. The Psychological Trap

Retail investors love futuristic companies.

They believe:

• “EV is the future”
• “Clean energy will win”
• “Disruptors always beat incumbents”
• “Visionary founders always succeed”
• “Uber 2.0 will be huge”

This mindset leads to blind optimism.

But Uber itself is not consistently profitable after 14 years.
BluSmart has even tougher economics.

This is narrative bias — a trap where investors fall in love with a story.

G. The Final Reality Check

BluSmart has:

Strengths:

• Strong brand
• Loyal customers
• Environmental mission
• Operational discipline
• Massive PR pull

Weaknesses:

• Heavy losses
• Capital-intensive model
• Weak unit economics
• Hard-to-scale infra
• Uncertain path to profitability
• High risk of overvaluation

IPO investors must decide:Are you buying a business?
Or buying a story?

3. Mamaearth (Honasa Consumer) – 2023 IPO (Bonus)

The D2C Darling That Exposed the Dark Side of Modern Branding

Mamaearth’s IPO became a defining moment in India’s new-age startup ecosystem — not because it created wealth, but because it revealed how branding can mislead investors and create massive valuation bubbles.

Let’s break this down deeply.

A. The Perfect Illusion: Why Everyone Thought Mamaearth Was a Goldmine

Mamaearth wasn’t just a company.
It was a cultural phenomenon.

• Every influencer used it
• Every Instagram mom recommended it
• Ads flooded every reel, every YouTube video
• The founders were media favorites
• The story was emotional, relatable, and powerful

Mamaearth made people feel the brand.
And in finance, when emotion enters… logic leaves.

Retail investors assumed:

• “Everyone uses Mamaearth → it must be profitable.”
• “It’s a strong brand → IPO will give bumper gains.”
• “Founders look honest → payouts will be huge.”
• “D2C is the future → valuation doesn’t matter.”

This was the beginning of the trap.

B. The Valuation Problem — The Monster Nobody Paid Attention To

When the DRHP filed:

• Mamaearth was valued at over ₹10,000 crore
• Profits were thin, inconsistent, and margin-sensitive
• And the P/E multiple was absurdly high compared to FMCG giants

Compare valuations:

Company	Profitability	P/E Approx
HUL	Deeply profitable	~50×
Nestlé	Highly stable	~70×
Dabur	Consistent	~45×
Mamaearth	Tiny profits, unstable	150×+

Mamaearth was being valued as if it was the next HUL
— even before proving long-term profitability.

This is called “future-priced valuation.”

And future-priced valuations are dangerous because:

• Even a small miss = stock crashes
• Expectations are too high
• Margin for error is zero

Mamaearth had not yet earned the right to charge such a premium.

C. High Revenue ≠ High Profit

The biggest misunderstanding.

Mamaearth had strong revenue growth:

• Influencer-led distribution
• Online-first strategy
• Wide product SKUs
• Heavy discounted sales
• Celebrity tie-ups

But profitability?
Different story.

Because:

• D2C margins are thin
• Customer acquisition cost (CAC) is extremely high
• Repeat rates flatten after initial excitement
• Offline expansion dilutes margins
• Logistics, returns, and warehouse costs balloon over time

Many investors didn’t understand this:

“Revenue grows easily.
Profit grows with difficulty.”

Mamaearth was celebrated for the wrong numbers.

D. OFS — The Silent Red Flag

A significant portion of Mamaearth’s IPO was Offer for Sale.

This means:

• Early investors wanted to exit
• Promoters were cashing out
• Company wouldn’t receive all the money
• Retail investors would be buying their exit liquidity

A perfect warning sign that retail ignored.

Why?

Because retail sees brand → not promoter behavior.

But smart investors always ask:

“If the future is so bright,
why are insiders selling?”

E. The Post-Listing Reality Check

The stock did list with some excitement, but reality caught up quickly.

Retail investors realized:

• The valuation was too high
• Margins weren’t improving fast
• D2C competition was rising
• FMCG giants were entering the same niche
• Growth was slowing post-pandemic
• CAC was rising
• Offline stores diluted profitability

The market corrected the stock sharply.

The bubble of hype deflated.

5. How to actually evaluate an IPO — a step-by-step framework

Below is a practical, replicable checklist you can use before applying.

A. Business & market position

• Is the company a leader in its category? #1 or #2 market share, better unit economics than peers, or a credible path to leadership. If not a leader, ask why it will win.
• Market size & addressable opportunity: can the business realistically scale to justify the valuation?

B. Financials & valuation

• Is the company profitable? If yes, compute P/E (PAT multiple) and compare to listed peers. If P/E is extremely high (100x+), understand the growth speed required to justify it. The Economic Times
• If unprofitable, use sales/EV multiples and unit economics: check revenue growth, gross margin, contribution margin per unit (how much each sale contributes to covering fixed costs).
• Look at adjusted profits: sometimes “one-time” gains inflate headline PAT — normalize earnings. (See recent Lenskart coverage where headline profit included non-cash items.) mint+1

Here’s an extensive guide on PAT:

PAT Multiple — The Lifeline of Smart IPO Investing

Let’s simplify this with no jargon.

PAT = Profit After Tax

This is REAL profit. Cash. Earnings. What actually remains.

PAT Multiple = Valuation ÷ Profit

It tells you how many years it would take to recover your investment through profits (if profits stay constant).

Example:
Company Valuation = ₹1,000 crore
Company Profit = ₹100 crore
PAT Multiple = 10×

This means:

If I bought 100% of this business,
I would recover my purchase price in 10 years.

Now imagine a company with:

Valuation = ₹20,000 crore
PAT = ₹40 crore
PAT Multiple = 500×

This means:

You need 500 years to recover your money.

Does that sound like an investment?
Or a donation?

This is the madness IPO investors have normalized.

This is how people become exit liquidity.

Here’s what actually happens:

1. Early investors exit on listing day.
2. Smart money books profit.
3. Stock spikes briefly.
4. Retail enters at the peak.
5. Stock corrects 15–30% within days.
6. Retail holds the bag.

And then retail investors say:

• “Market is rigged.”
• “IPOs are scams.”
• “I always lose money.”

But it was never the market.
It was the mindset — buying at the moment of maximum euphoria.

C. Unit economics & margins

• Gross margin and contribution margin — are they healthy and scalable?
• Customer acquisition cost (CAC) vs lifetime value (LTV) for consumer businesses: if CAC > LTV, growth is unsustainable.

D. Management, promoter intent & ownership

• Promoter stake post-IPO: a sharp promoter stake reduction or large OFS may indicate existing shareholders exiting. That’s not always bad, but ask why they are selling now.
• Founder/institutional alignment: strong promoter alignment with long-term success matters.

E. Use of proceeds (if fresh issue)

• Will the IPO money be used for growth or marketing only? If the proceeds are primarily for PR/brand-building with no clear ROI, be cautious.

F. Peers & precedent

• Compare valuation multiples to true peers (similar business model, geography, scale) — not to random tech unicorns abroad. Overpaying relative to peers is a red flag.
• Has the business model been proven elsewhere? Quick commerce and deep-discount marketplaces have struggled to show durable profitability in many geographies — peer history matters. uniqus.com

G. Market signals (but don’t base decision on them)

GMP / grey market premium — a high GMP can indicate demand, but it’s noisy and can be manipulated; use it as one signal, not the decision

6. Quick reference — useful articles & tools (read these before you act)

• Fresh issue vs Offer for Sale (explainers): Groww / ClearTax guides. Groww+1
• Market-wide data on listing gains & IPO trends (2024–25): Uniqus / EY / Trendlyne / news coverage summarizing average listing gains and volumes. uniqus.com+2EY+2
• Grey Market Premium / GMP trackers: IPOWatch, IPOCentral, InvestorGain (useful for sentiment but noisy). IPO Watch+2IPO Central+2

Recent deep-dive on valuation risk (example): coverage of Lenskart’s high P/E and debate on profit quality.

Final Message

You are entering one of the most dangerous IPO environments in the last decade.

Listing gains are falling.
Valuations are exploding.
Hype is rising.
Profits are shrinking.
Retail behavior hasn’t evolved.

This combination only ends in two ways:

1. You adapt, analyze, and survive — while others panic.

2. You follow the crowd — and become someone else’s exit liquidity.

The window for huge, easy IPO gains is closing.
And only people who rethink their strategy today will profit tomorrow.

We have compiled a detailed article on Personal Branding don’t forget to check out: The future of personal branding