An IPO is as good as the business it operates in. This is the starting point when it comes to reading the IPO prospectus. As Peter Lynch said, “Behind every stock there is a business. Try understanding what the business is all about.” That equally applies in case of IPOs too. Check out the competitive landscape in which the company is operating and if the company has managed to create unique strengths or entry barriers to fresh competition. Also check if there are any likely disruptions to the industry that are likely from emerging business models. For example, traditional cars are facing completion from electric cars and hotels are facing competition from aggregators like OYO and AirBnB. These are emerging risks that could have a substantial impact on the value of the business.