An Indian IPO comes with a draft or red herring prospectus that often runs to several hundred pages. Most investors never open it and decide on the grey market premium and a headline instead. AI changes the cost of reading that document. It does not change the rule that the document, not the summary, is the source.
So the useful question is not "can AI analyse an IPO" but "how do I check what it tells me". Here is the method we use on every issue we track, and what to look for in any AI-made summary, ours included.
- Every number has a page reference in the offer document trust, then check
- Peers and P/E are the ones the document itself names comparable
- Outlook is quoted as the company states it labelled as a claim
- A figure with no source do not rely on it
- A verdict: "apply" or "avoid" not analysis
Start from the offer document, not from opinions. Ask the model to work only from the DRHP or RHP and to cite the page for each figure. A number without a page is a number you cannot check, and language models do produce plausible figures that are not in the document. On our one-pagers every extracted figure carries its page reference, so you can open the document at that page.
Ask the same five questions every time. Our analysis of each offer document answers them in plain language:
- How it makes money: which segments and regions the revenue comes from.
- Is it growing, and is profit turning into cash: sales growth, profit, and cash from operations over the years the document reports.
- How much cushion it has: borrowing against its own money, compared with what is usual in its sector.
- What you pay, and who gets the money: how much of the issue is fresh capital for the company and how much goes to selling shareholders.
- Who controls it, and what is on record: promoters, their holding, and the litigation the document discloses.
Valuation: use the peers the document names. Every offer document has a basis-for-issue-price section that lists listed peers and their P/E. Our one-pagers show that peer comparison, including the median P/E of the peers the document names, so the valuation question becomes concrete: how does the asking price compare with the companies the issuer itself chose as comparable.
Financials: read the trend, not one year. A single strong year is easy to present. Three years of revenue, profit and operating cash side by side show whether profit is turning into cash, which is the question a one-line summary skips.
Industry outlook: keep the company's claims labelled as claims. The industry section of an offer document is usually commissioned by the issuer. We show the outlook "as the document states it", and separately flag where the document's own pages disagree with its pitch, for example when it calls itself the largest but a peer it names is several times bigger, or calls its business diversified while its risk factors describe concentration.
GMP: treat it as a signal with a record, not a forecast. Grey market premium is unregulated and self-reported. We track it and, after listing, show how the stock actually opened against what GMP implied. Our running record of GMP against real listing-day opens is published, issue by issue, on our GMP accuracy research page.
Subscription: watch the categories, not the total. A headline "50 times subscribed" can be mostly one category. We show live subscription by QIB, non-institutional and retail from exchange data, because who is bidding says more than how much.
What AI should not do for you is decide. A tool that says "apply" or "avoid" is giving a verdict, not analysis, and it cannot know your finances or your risk appetite. We do not give verdicts. We lay out what the document says, where it says it, and where it contradicts itself, and leave the decision with you.
Where to find all of this: each IPO we track has a one-pager with the five questions, financials, peer comparison, outlook, risks and strengths, promoter holding and live subscription, plus the GMP tracker, the IPO calendar and allotment status links. Our explainer on what a DRHP is covers the document itself.