Introduction

When you’re excited to invest in an IPO, one quick way to judge its potential is to check its IPO Ratings.
 But what do these ratings really mean? Who gives them? Should you trust them blindly?
 In this complete guide, you’ll learn:
 ✅ What IPO Ratings are.
 ✅ Who provides them.
 ✅ How they’re calculated.
 ✅ How they help you decide.
 ✅ Common mistakes to avoid when using ratings.
 ✅ Plus, real examples, easy tables, and top FAQs!

What are IPO Ratings?

IPO Ratings are expert scores given to an IPO based on various factors like:

• The company’s financial health.
• Industry outlook.
• Management quality.
• Valuation compared to competitors.
• Risks involved.

They’re like a quick summary to help investors understand whether the IPO is fundamentally strong, average, or risky.

Who Gives IPO Ratings?

✅ Credit Rating Agencies: CRISIL, ICRA, CARE Ratings sometimes provide grades.
 ✅ Brokerage Houses: ICICI Direct, Angel One, HDFC Securities give research reports and “Apply/Avoid” calls.
 ✅ Financial Portals: Moneycontrol, IPOCentral, Chittorgarh share ratings based on expert analysis.

IPO Ratings vs Credit Ratings

👉 IPO Ratings are different from credit ratings.
 ✅ Credit Rating: Shows company’s ability to repay debt.
 ✅ IPO Rating: Evaluates investment attractiveness at the IPO price.

Why IPO Ratings Matter

👉 Saves you time — you get a quick snapshot of the IPO’s strengths and weaknesses.
 👉 Helps new investors understand complicated financial data in simple words.
 👉 Acts as an extra filter, so you don’t blindly apply for every IPO.
 👉 Often affects the subscription — good ratings attract more investors.

How IPO Ratings are Calculated

A rating agency or analyst considers:
 ✅ Business Model: Is it future-ready?
 ✅ Industry Trends: Is the sector growing or declining?
 ✅ Financials: Revenue, profit margins, debt-to-equity ratio.
 ✅ Promoter Reputation: Any fraud or controversies?
 ✅ Valuation: Is the IPO price fair?
 ✅ GMP & Subscription: Is there market buzz?

Each point is scored, then combined into a final rating.

Sample IPO Rating Scale

Where to Check IPO Ratings

 ✅ Brokerage Research Reports (ICICI Direct, Angel One)
 ✅ IPO blogs like TopShareBroker, IPOCentral, Chittorgarh
 ✅ Financial news sites (Moneycontrol, Business Standard)

IPO Ratings: What to Look For

👉 Don’t just see the final number.
 ✅ Read the reasons behind it.
 ✅ Compare it with ratings from other sources.
 ✅ See if it matches the company’s financials.

IPO Ratings Example

Let’s take an example:
 Company XYZ Ltd — IPO Rating

How IPO Ratings Influence Subscription

👉 A strong 4/5 or 5/5 rating boosts investor confidence.
 👉 Weak ratings may lead to undersubscription.

IPO Ratings vs Grey Market Premium

✅ IPO Ratings: Based on company facts and data.
 ✅ GMP: Based on demand in the unofficial market.

👉 Use both together for a clearer picture.

Sample Table: Recent IPO Ratings