Estimate a company's fair value using EPS and industry P/E, and see the upside or downside versus the IPO issue price.
Fair value = EPS × industry P/EUpside / downside % = (fair value − issue price) ÷ issue price × 100If the result is positive the issue may be undervalued versus peers, if negative it may be richly pricedIs this IPO overvalued or undervalued is the right question, and peer P/E is the classic shortcut: take the company's EPS, multiply by the listed peers' average P/E from the RHP's Basis for Issue Price section, and compare with the issue price. Positive upside hints undervaluation versus peers, while negative hints rich pricing.
Keep the basis consistent, trailing EPS with trailing peer multiples, and know the method's limits: it needs positive earnings (loss-makers need P/B or EV to sales), ignores growth differences, and says nothing about listing-day sentiment or GMP.
Use it as a filter, not a verdict: fairly priced issues with strong subscription still list well, and expensive issues with frenzy list higher. Cross-check with subscription data and GMP before deciding.
A rough intrinsic price derived by applying the industry's average P/E multiple to the company's earnings per share.
No. Fair value is a valuation estimate; the actual listing price is set by market demand and GMP on listing day.
Use the same basis on both sides: trailing EPS with trailing peer P/E, as disclosed in the RHP. Mixing trailing EPS with forward P/E skews the answer.
P/E needs positive earnings. For loss-making IPOs analysts use P/B, EV/EBITDA or price-to-sales versus peers instead of this calculator.
The 'Basis for Issue Price' section lists peer companies with their P/E, P/B and return ratios — that table is the input for this method.
Fair value ignores listing-day sentiment, subscription frenzy, GMP and market mood, which is why actual listings often overshoot or undershoot it.
Last updated: 14 Oct 2026, 02:25 IST