Critical Warning
This is a highly simplified tool using only PE multiples. It ignores growth expectations, which are the primary driver of IPO valuations. Do not base investment decisions solely on this calculator. Always read the official IPO prospectus and consult a SEBI-registered advisor.
Enter IPO & Industry Data
Valuation estimates update automatically as you enter data
Valuation Analysis Results
(Threshold: ±20% for "Fairly Valued")
How This Valuation Works
Fair Value Formula
Fair Value = Latest EPS × Industry Average PE
This applies the sector's typical valuation multiple to the company's current earnings.
Premium/Discount Calculation
Premium/Discount % = ((IPO Price / Fair Value) - 1) × 100
Positive % = IPO priced above fair value. Negative % = IPO priced below fair value.
Important Limitation
This method completely ignores future growth expectations, which are often the primary reason IPOs are valued at premiums to current earnings. IPO prices reflect potential, not just today's earnings.
Why Verdicts Can Be Misleading
An "undervalued" verdict does NOT mean it's a good investment. High-growth companies deserve premium valuations. Always analyze the company's prospects, management, risks, and competitive position.
Why IPO Valuations Differ from Peers
Growth Expectations
High-growth companies command premium valuations above current earnings-based PE ratios.
Market Sentiment
Bull markets and investor enthusiasm push IPO valuations higher. Bear conditions have the opposite effect.
Demand & Subscription
High oversubscription often leads to listing at or above offer price, reflecting strong investor demand.
Company-Specific Factors
Unique technology, strong brand, low debt, experienced management, and market position justify different valuations.
Risk Profile
Higher perceived risks lead to lower valuations. Conversely, low-risk, stable companies may trade at premiums.
Frequently Asked Questions
No. This is a very basic comparison tool. IPO investing requires analyzing company prospects, management quality, financials, risks in the RHP, market conditions, and grey market premium (GMP). This tool ignores most critical factors.
PE-based valuation doesn't work for loss-making companies. Many tech/startup IPOs are unprofitable initially. They're valued using revenue multiples, DCF models, or other metrics instead. This calculator requires positive EPS.
Websites like Screener.in, Tickertape, and Moneycontrol show sector PE ratios. Compare listed companies in the same industry as the IPO. Ensure you're using truly comparable peers for accuracy.
Professional valuations use Discounted Cash Flow (DCF), Price-to-Sales (P/S), EV/EBITDA, Price-to-Book (P/B), and comparable transactions. Professionals combine multiple methods for accuracy.
It means the IPO offer price is within ±20% of the calculated fair value based ONLY on EPS × Industry PE. This does NOT mean it's a good investment. Growth prospects and risks matter far more.
Listing gains reflect market expectations about future performance. The grey market premium (GMP), subscription levels, analyst views, and investor demand determine listing prices. This calculator doesn't predict listing prices.
Disclaimer
This IPO Valuation Estimator uses a highly simplified PE multiple approach and is for educational/illustrative purposes only. It provides a rough comparison and does not represent complete or accurate valuation. IPO pricing involves numerous complex factors beyond this tool's scope, including growth forecasts, market conditions, risk assessment, and investor demand. Do not use this as the sole basis for investment decisions. Always read the official IPO prospectus (RHP/DRHP) and consult with a SEBI-registered financial advisor.