An IPO — a company's first sale of shares to the public — comes wrapped in hype, headlines and the fear of missing out. But do IPOs actually make money? The honest answer is: some do, many don't — and the famous ones are often the worst. Let's look at real cases. This is for learning only, not advice.
What an IPO is (quickly)
When a private company wants to raise money and list on the exchange, it sells shares to the public for the first time through an Initial Public Offering. You apply at a fixed price; if you get an allotment, the shares then start trading on the exchange, where the price can go up or down.
The dream vs the data
The dream is "listing gains" — the stock lists far above the IPO price and you pocket a quick profit. It does happen. But it is far from guaranteed, and the biggest, most-hyped IPOs have burned investors badly. Two famous examples:
| IPO | IPO price | Listed at | Price in 2026 |
|---|---|---|---|
| Paytm (2021) | ₹2,150 | ₹1,950 (−9%) | ~₹1,800 (still below issue) |
| LIC (2022) | ₹949 | ₹872 (−8%) | ~₹403 (−58%) |
LIC was India's biggest-ever IPO, backed by the most trusted name in insurance, and crores of ordinary Indians applied. Years later it is down about 58% from its issue price. Paytm has never regained its issue price. Hype and a big brand are not the same as a good investment.
Why so many IPOs disappoint
- The seller sets the price. A company and its bankers choose the IPO price to raise the most money — which often means it's priced richly, leaving little on the table for you.
- They sell when it's good for them. Companies tend to go public when sentiment is hot and valuations are high — exactly when you should be careful.
- Hype ≠ value. A famous name and heavy oversubscription tell you about demand, not about whether the price is fair.
How to think about IPOs sensibly
- Treat an IPO like any other stock: understand the business, read the numbers, and ask whether the price is reasonable — the same discipline as researching any stock.
- Ignore the "grey market premium" chatter — it's a rumour-driven number, not a valuation.
- Never put a large chunk of your money into a single IPO because it's "hot." That's the concentration trap we cover in position sizing and diversification.
The takeaway
IPOs are not a shortcut to riches. A few deliver strong listing gains; many, including some of the biggest names, leave investors underwater for years. Judge an IPO by the business and the price — not by the hype around it. Most of the time, the calm, boring path of a diversified, disciplined portfolio beats chasing the next hot listing.
What is an IPO and how do you apply?
An IPO is your chance to buy a company as it goes public. Exactly how to apply in 2026 — UPI, ASBA, lot size and allotment, step by step.
Primary market vs secondary market: the difference
Where does your money actually go when you buy a share? The simple difference between the primary and secondary market — with real examples.
Anchor Investors Entered 242 IPOs. But Who Stayed Invested After the Lock-In?
Anchor investors are often seen as a stamp of confidence in an IPO. But SEBI's latest study suggests that the more revealing story may begin after the IPO is listed. How much did these investors actually sell after the lock-in periods, and did their behaviour differ from what retail investors might
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