NASDAQ IPOs: How Indians can participate in new listings
The US IPO market raised $22.7 billion across 171 NASDAQ listings in 2024. Reddit surged 48% on day one. CoreWeave climbed over 250% within months. Indian investors watched these gains unfold from the sidelines. But they no longer have to.
RBI's Liberalised Remittance Scheme allows Indian residents to invest up to $250,000 per year in foreign assets. This includes U.S. stocks listed on NASDAQ. The process demands careful planning around regulations, timing, and risk management.
This guide explains how NASDAQ IPOs work, what Indian investors need to participate, and the strategies that distinguish profitable IPO investments from costly mistakes. Whether you want to catch the next big tech listing or avoid hype-driven traps, the framework here will help you decide with clarity.
How NASDAQ IPOs work
A company's journey from private to public on NASDAQ takes 6 to 12 months. It begins when the company hires investment banks as underwriters. These banks run due diligence, draft the S-1 registration filing, and submit it to the SEC.
The SEC review process takes 75 to 120 days. Multiple rounds of comments and amendments follow before approval. Once cleared, the company launches a 7- to 10-day roadshow. Management presents to institutional investors while the book-building process gauges demand.
Allocation heavily favours large investors. Approximately 90% of shares are held by institutions. Retail investors receive about 10%. This stands in sharp contrast to India's SEBI-regulated system, where retail investors get a minimum 35% allocation.
Final pricing happens the night before listing. Underwriters set the IPO price based on investor demand. A greenshoe option allows them to increase the offering by up to 15% in oversubscribed deals.
On listing day, NASDAQ runs an opening auction with a minimum 10-minute display period. Orders enter the system, and the IPO Execution Officer determines the opening price by balancing supply against demand.
NASDAQ tightened its listing rules in April 2025. Companies must now meet Market Value of Unrestricted Publicly Held Shares requirements solely from IPO proceeds. Previously issued shares registered for resale no longer count. This raises the minimum IPO raise to $15 million for the NASDAQ Capital Market under equity standards.
Can Indian investors buy NASDAQ-listed IPO shares?
Yes, but with a major caveat. Indian residents invest in U.S. stocks through the RBI's Liberalised Remittance Scheme. The LRS permits remittances of up to $250,000 per financial year for foreign investments.
If you are new to investing in the U.S. market, our beginner's guide to investing in U.S. stocks from India covers the complete process, step by step.
This limit stays unchanged for FY 2026-27.
Direct IPO allocation is nearly impossible for Indian retail investors. US IPOs allocate shares to American institutional and retail investors first. Indians must buy shares after the listing begins on the secondary market. Some platforms, such as Vested Finance, now offer pre-IPO access to private companies with a $10,000 minimum, but these are secondary-market transactions—not guaranteed IPO allocations.
The tax structure involves multiple layers:
- TCS: 20% on amounts above ₹10 lakh remitted for foreign investments (refundable when filing ITR)
- Short-term capital gains: Holdings under 24 months attract your income tax slab rate
- Long-term capital gains: Holdings beyond 24 months face a flat 12.5% rate without indexation
- U.S. dividend withholding: 25% deducted at source before payment reaches you
The India-US Double Taxation Avoidance Agreement lets you claim a foreign tax credit to prevent double taxation. File Form 67 before your ITR submission to avail this relief.
Mandatory compliance includes Schedule FA disclosure of all foreign assets in ITR-2 or ITR-3. Non-disclosure attracts penalties of ₹10 lakh per year under the Black Money Act. Keep records of every transaction for accurate reporting.
Recent tech IPOs worth watching
The 2024-2025 period marked a strong IPO recovery. NASDAQ welcomed 171 IPOs in 2024, and 2025 saw 347 U.S. listings—the highest since 2021.
If you are choosing between U.S. indices, our Nasdaq vs. Dow Jones comparison for Indian investors outlines the key differences.
Reddit debuted in March 2024 at $34 per share. It rose 48% on day one and gained 469% from its IPO price by early 2026. Astera Labs listed at $36, jumped 72% on listing day, and climbed 301% from its IPO price. ServiceTitan was priced at $71 in December 2024 and gained 42% on its first trading session.
CoreWeave's March 2025 IPO raised $1.5 billion for AI cloud infrastructure. It opened flat at $40 but surged over 250% by June after Nvidia disclosed a 7% stake. Figma's July 2025 debut saw a 250% first-day pop — the largest since 2021 — reaching $68 billion in market cap before falling 80% from that peak after its lock-up expired.
Circle Internet gained 168% on debut. Medline's December 2025 offering raised $6.26 billion as the year's largest IPO.
Looking ahead, 2026 may bring historic listings. SpaceX has confirmed plans for an IPO at a potential valuation of $1.5 trillion. Kraken, Canva, and possibly OpenAI are expected to debut, making 2026 potentially the biggest IPO year since 2021.
Post-IPO investment strategy that works
Research shows 4 out of 5 IPOs underperform a small-cap index over 3 to 5 years. Only 29% outperformed the market over the long term. Average first-day returns reach 18.8%, but the average 3-year annualised return for stocks bought at first-day close sits at just 6% — versus 11% for the broader market.
Most experts recommend waiting rather than buying at the listing price. First-day buyers typically pay a premium and watch prices slide afterwards. Strategic entry points include waiting for lock-up expiration at 90 to 180 days post-IPO. Insider selling during this window often creates price dips. Uber dropped 17% as it approached its lock-up expiry.
Waiting for two quarterly earnings cycles — about six months — lets you verify whether the company delivers on its roadshow promises. Many newly public companies overstate growth projections to generate listing-day excitement.
Dollar-cost averaging works well for new listings. Building positions across multiple purchases helps manage the extreme price swings common in freshly listed stocks. This approach captures several price points as stocks settle toward their true valuations after the initial hype fades.
A practical approach is to divide your planned investment into three or four equal parts. Deploy the first after the first earnings report. Add the second near lock-up expiration. Place the third after observing how the stock reacts to insider selling. This staged entry lowers your average cost and reduces timing risk.
How to evaluate IPO stocks
Start with the S-1 filing. Focus on the Risk Factors and Use of Proceeds sections. If you cannot explain the business model after reading the prospectus, skip the stock.
Review three or more years of financial data: track revenue growth trends, profit margins, and cash flow direction. For profitable companies, compare P/E ratios against industry peers. For high-growth pre-profit companies, use price-to-sales or EV/Revenue multiples. The S&P 500 historical P/S average sits between 1x and 3x.
Red flags demand attention:
- Declining or stagnant revenues over the last two years
- Excessive debt relative to cash and assets
- Heavy customer concentration (CoreWeave derived 62% of revenue from Microsoft alone)
- Material weaknesses flagged in financial controls
- IPO proceeds are directed primarily toward repaying existing debt
Assess the management team's track record. Founders who retain significant post-IPO stakes demonstrate confidence. Compare the company's IPO valuation with those of public competitors. If the price implies a premium over established peers, question what justifies the markup.
What the IPO lock-up period means for your timing
The lock-up period restricts insiders from selling shares for 90 to 180 days after listing. Most lock-ups last 180 days. This mechanism prevents a flood of shares from hitting the market and crashing the price.
Stock prices often decline before lock-up expiration. Investors anticipate insider selling pressure and adjust their positions accordingly. Severity depends on the locked shares as a proportion of total float, the gap between the current price and the IPO price, and the company's performance since its debut. Figma's 80% drop from its peak coincided with its lock-up expiry.
Track lock-up dates through SEC EDGAR filings. The S-1 prospectus states exact lock-up terms. Some lock-ups feature early-release triggers if stock prices exceed certain thresholds—often 133% of the IPO price for consecutive trading days. Staggered releases at different dates also occur in some offerings.
For patient investors, lock-up expiration often creates better buying opportunities. If insiders hold their shares after the restriction lifts, it signals genuine confidence worth noting. This information is public — track Form 4 filings on SEC EDGAR to monitor insider transactions.
Risk factors every new listing carries
Listing day volatility swings dramatically. Average first-day gains hit 36% in 2020 and reached 60% during the dot-com era. This stems from speculative trading, low liquidity, supply-demand imbalance, and media-driven hype.
Newly public companies lack track records as public entities. Fewer data points exist for fundamental analysis. Information asymmetry gives insiders an advantage over retail investors. Initial analyst coverage remains limited in the early months.
Hype-driven pricing frequently disappoints. When excitement fades, real demand becomes clear—usually resulting in price declines. Historical data shows 24 of 37 oil and gas IPOs from 1980 were eventually delisted through liquidation or bankruptcy.
Sector-specific risks vary significantly. Biotechnology IPOs carry binary outcomes and behave like lottery tickets. Tech IPOs remain subject to irrational pricing during bull markets. Safer choices favour established industries with proven business models over speculative ventures.
Currency risk adds another layer for Indian investors. The rupee-dollar exchange rate affects your real returns. A stock gaining 10% in dollar terms may yield more or less in rupee terms depending on exchange rate movements during your holding period.
NASDAQ IPOs give Indian investors access to innovative global companies at early stages. The regulatory pathway through LRS exists, nd the platforms to execute trades are available. The real challenge lies in discipline and patience.
The statistics confirm that patience beats urgency — 80% of IPOs underperform over 3 to 5 years. Wait for lock-up expiration, verify earnings over two quarters, and use dollar-cost averaging to manage risk. Focus on companies with clear business models, reasonable valuations, and strong management teams. The opportunities in NASDAQ IPO investing from India are real, but only disciplined investors consistently capture them.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
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Invest in 11,000+ US stocks & ETFs
The US IPO market raised $22.7 billion across 171 NASDAQ listings in 2024. Reddit surged 48% on day one. CoreWeave climbed over 250% within months. Indian investors watched these gains unfold from the sidelines. But they no longer have to.
RBI's Liberalised Remittance Scheme allows Indian residents to invest up to $250,000 per year in foreign assets. This includes U.S. stocks listed on NASDAQ. The process demands careful planning around regulations, timing, and risk management.
This guide explains how NASDAQ IPOs work, what Indian investors need to participate, and the strategies that distinguish profitable IPO investments from costly mistakes. Whether you want to catch the next big tech listing or avoid hype-driven traps, the framework here will help you decide with clarity.
How NASDAQ IPOs work
A company's journey from private to public on NASDAQ takes 6 to 12 months. It begins when the company hires investment banks as underwriters. These banks run due diligence, draft the S-1 registration filing, and submit it to the SEC.
The SEC review process takes 75 to 120 days. Multiple rounds of comments and amendments follow before approval. Once cleared, the company launches a 7- to 10-day roadshow. Management presents to institutional investors while the book-building process gauges demand.
Allocation heavily favours large investors. Approximately 90% of shares are held by institutions. Retail investors receive about 10%. This stands in sharp contrast to India's SEBI-regulated system, where retail investors get a minimum 35% allocation.
Final pricing happens the night before listing. Underwriters set the IPO price based on investor demand. A greenshoe option allows them to increase the offering by up to 15% in oversubscribed deals.
On listing day, NASDAQ runs an opening auction with a minimum 10-minute display period. Orders enter the system, and the IPO Execution Officer determines the opening price by balancing supply against demand.
NASDAQ tightened its listing rules in April 2025. Companies must now meet Market Value of Unrestricted Publicly Held Shares requirements solely from IPO proceeds. Previously issued shares registered for resale no longer count. This raises the minimum IPO raise to $15 million for the NASDAQ Capital Market under equity standards.
Can Indian investors buy NASDAQ-listed IPO shares?
Yes, but with a major caveat. Indian residents invest in U.S. stocks through the RBI's Liberalised Remittance Scheme. The LRS permits remittances of up to $250,000 per financial year for foreign investments.
If you are new to investing in the U.S. market, our beginner's guide to investing in U.S. stocks from India covers the complete process, step by step.
This limit stays unchanged for FY 2026-27.
Direct IPO allocation is nearly impossible for Indian retail investors. US IPOs allocate shares to American institutional and retail investors first. Indians must buy shares after the listing begins on the secondary market. Some platforms, such as Vested Finance, now offer pre-IPO access to private companies with a $10,000 minimum, but these are secondary-market transactions—not guaranteed IPO allocations.
The tax structure involves multiple layers:
- TCS: 20% on amounts above ₹10 lakh remitted for foreign investments (refundable when filing ITR)
- Short-term capital gains: Holdings under 24 months attract your income tax slab rate
- Long-term capital gains: Holdings beyond 24 months face a flat 12.5% rate without indexation
- U.S. dividend withholding: 25% deducted at source before payment reaches you
The India-US Double Taxation Avoidance Agreement lets you claim a foreign tax credit to prevent double taxation. File Form 67 before your ITR submission to avail this relief.
Mandatory compliance includes Schedule FA disclosure of all foreign assets in ITR-2 or ITR-3. Non-disclosure attracts penalties of ₹10 lakh per year under the Black Money Act. Keep records of every transaction for accurate reporting.
Recent tech IPOs worth watching
The 2024-2025 period marked a strong IPO recovery. NASDAQ welcomed 171 IPOs in 2024, and 2025 saw 347 U.S. listings—the highest since 2021.
If you are choosing between U.S. indices, our Nasdaq vs. Dow Jones comparison for Indian investors outlines the key differences.
Reddit debuted in March 2024 at $34 per share. It rose 48% on day one and gained 469% from its IPO price by early 2026. Astera Labs listed at $36, jumped 72% on listing day, and climbed 301% from its IPO price. ServiceTitan was priced at $71 in December 2024 and gained 42% on its first trading session.
CoreWeave's March 2025 IPO raised $1.5 billion for AI cloud infrastructure. It opened flat at $40 but surged over 250% by June after Nvidia disclosed a 7% stake. Figma's July 2025 debut saw a 250% first-day pop — the largest since 2021 — reaching $68 billion in market cap before falling 80% from that peak after its lock-up expired.
Circle Internet gained 168% on debut. Medline's December 2025 offering raised $6.26 billion as the year's largest IPO.
Looking ahead, 2026 may bring historic listings. SpaceX has confirmed plans for an IPO at a potential valuation of $1.5 trillion. Kraken, Canva, and possibly OpenAI are expected to debut, making 2026 potentially the biggest IPO year since 2021.
Post-IPO investment strategy that works
Research shows 4 out of 5 IPOs underperform a small-cap index over 3 to 5 years. Only 29% outperformed the market over the long term. Average first-day returns reach 18.8%, but the average 3-year annualised return for stocks bought at first-day close sits at just 6% — versus 11% for the broader market.
Most experts recommend waiting rather than buying at the listing price. First-day buyers typically pay a premium and watch prices slide afterwards. Strategic entry points include waiting for lock-up expiration at 90 to 180 days post-IPO. Insider selling during this window often creates price dips. Uber dropped 17% as it approached its lock-up expiry.
Waiting for two quarterly earnings cycles — about six months — lets you verify whether the company delivers on its roadshow promises. Many newly public companies overstate growth projections to generate listing-day excitement.
Dollar-cost averaging works well for new listings. Building positions across multiple purchases helps manage the extreme price swings common in freshly listed stocks. This approach captures several price points as stocks settle toward their true valuations after the initial hype fades.
A practical approach is to divide your planned investment into three or four equal parts. Deploy the first after the first earnings report. Add the second near lock-up expiration. Place the third after observing how the stock reacts to insider selling. This staged entry lowers your average cost and reduces timing risk.
How to evaluate IPO stocks
Start with the S-1 filing. Focus on the Risk Factors and Use of Proceeds sections. If you cannot explain the business model after reading the prospectus, skip the stock.
Review three or more years of financial data: track revenue growth trends, profit margins, and cash flow direction. For profitable companies, compare P/E ratios against industry peers. For high-growth pre-profit companies, use price-to-sales or EV/Revenue multiples. The S&P 500 historical P/S average sits between 1x and 3x.
Red flags demand attention:
- Declining or stagnant revenues over the last two years
- Excessive debt relative to cash and assets
- Heavy customer concentration (CoreWeave derived 62% of revenue from Microsoft alone)
- Material weaknesses flagged in financial controls
- IPO proceeds are directed primarily toward repaying existing debt
Assess the management team's track record. Founders who retain significant post-IPO stakes demonstrate confidence. Compare the company's IPO valuation with those of public competitors. If the price implies a premium over established peers, question what justifies the markup.
What the IPO lock-up period means for your timing
The lock-up period restricts insiders from selling shares for 90 to 180 days after listing. Most lock-ups last 180 days. This mechanism prevents a flood of shares from hitting the market and crashing the price.
Stock prices often decline before lock-up expiration. Investors anticipate insider selling pressure and adjust their positions accordingly. Severity depends on the locked shares as a proportion of total float, the gap between the current price and the IPO price, and the company's performance since its debut. Figma's 80% drop from its peak coincided with its lock-up expiry.
Track lock-up dates through SEC EDGAR filings. The S-1 prospectus states exact lock-up terms. Some lock-ups feature early-release triggers if stock prices exceed certain thresholds—often 133% of the IPO price for consecutive trading days. Staggered releases at different dates also occur in some offerings.
For patient investors, lock-up expiration often creates better buying opportunities. If insiders hold their shares after the restriction lifts, it signals genuine confidence worth noting. This information is public — track Form 4 filings on SEC EDGAR to monitor insider transactions.
Risk factors every new listing carries
Listing day volatility swings dramatically. Average first-day gains hit 36% in 2020 and reached 60% during the dot-com era. This stems from speculative trading, low liquidity, supply-demand imbalance, and media-driven hype.
Newly public companies lack track records as public entities. Fewer data points exist for fundamental analysis. Information asymmetry gives insiders an advantage over retail investors. Initial analyst coverage remains limited in the early months.
Hype-driven pricing frequently disappoints. When excitement fades, real demand becomes clear—usually resulting in price declines. Historical data shows 24 of 37 oil and gas IPOs from 1980 were eventually delisted through liquidation or bankruptcy.
Sector-specific risks vary significantly. Biotechnology IPOs carry binary outcomes and behave like lottery tickets. Tech IPOs remain subject to irrational pricing during bull markets. Safer choices favour established industries with proven business models over speculative ventures.
Currency risk adds another layer for Indian investors. The rupee-dollar exchange rate affects your real returns. A stock gaining 10% in dollar terms may yield more or less in rupee terms depending on exchange rate movements during your holding period.
NASDAQ IPOs give Indian investors access to innovative global companies at early stages. The regulatory pathway through LRS exists, nd the platforms to execute trades are available. The real challenge lies in discipline and patience.
The statistics confirm that patience beats urgency — 80% of IPOs underperform over 3 to 5 years. Wait for lock-up expiration, verify earnings over two quarters, and use dollar-cost averaging to manage risk. Focus on companies with clear business models, reasonable valuations, and strong management teams. The opportunities in NASDAQ IPO investing from India are real, but only disciplined investors consistently capture them.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Ready to earn on every trade?
Invest in 11,000+ US stocks & ETFs
