How to Judge IPO Valuation: P/E, Peers, NAV and Red Flags

Start with post-issue P/E, not pre-issue

The only P/E that matters is on the fully-diluted, post-issue share count — pre-issue EPS flatters every IPO. Take the upper band price ÷ post-issue EPS. Then compare against the median P/E of listed peers named in the RHP's own peer table (not random companies): cheaper than median is interesting, 25%+ premium needs an earnings-growth story to justify it.

Four numbers besides P/E

• PAT trend — profits growing, flat, or propped by other income? Three restated years minimum.
• ROE/RoCE — what the business earns on your money; sub-12% ROE at 40x P/E is a warning.
• Debt/equity — leverage above 1x with slowing growth deserves caution.
• Fresh vs OFS — money reaching the company (fresh) versus exits (OFS). OFS-heavy + promoter selling + rich P/E is the classic avoid-pattern.

Red-flag checklist

• Related-party revenue or loans dominating the books.
• Material litigation or regulatory actions buried in risk factors.
• Promoter holding collapsing post-issue with a large OFS.
• Outstanding objects funded by debt taken just before the IPO.
• Peer table with no real listed peers (or suspicious P/E in %).

What DostIpo's X-Ray does with all this

The Fundamental X-Ray scores exactly these pillars — growth, valuation-vs-peers, promoter structure, risk — with every point traceable to its inputs on the IPO page, and the full rulebook on the methodology page. Use it as a checklist, not a verdict: scores organise evidence, they don't replace judgment.