Tip 1 - Check The Past Performance Of The Company:
Before you invest in a company's IPO, do check for the historical performance of the company year by year. If the company's yearly revenue is growing around 20% each year, then it can be assumed that the firm is growing well.
Also, compare the company's performance with the average performance of the sector in which it belongs to.
If the performance of that company is lower than the industry average, then the company is considered to be an underperformer.
Ep 155: Before Trading or Investing in an IPO: What YOU Should KNOW!
In that case, you should look for other better companies to invest your money.
Another important thing is to check for any sudden increase in company's revenues before the launch of IPO. In that case, those IPO stocks are better to be avoided.