The first and foremost topic that comes to mind when I think of Personal Finance is the stock market, and more specifically the IPOs. In India, one should always follow this thumb rule for IPOs - Never ever put money in an IPO, more so if its from private sector.
The reasons are pretty simple. The rational for IPO in an ideal world is for new and relatively small companies to fund their expansion, and hence offering relatively good growth potential compared with matured companies. In India, however, most promoters access the primary markets to offload their stakes, and only after the company has either already grown decently, or hasn't started as yet. There are very few of the actual IPO-worthy stocks. And, to make matters worse, the pricing of the IPOs are done pretty aggressively, and there is usually nothing left on the table.
Little wonder most of the IPOs list in deep discounts in India, and they only tend to do well in absolute bubble scenarios. One exception could be the public sector companies which would be divested one by one - there the owner is government, and they do not have a 'personal' incentive to suck the last penny out from the investors. And secondly, they tend to offer some good discount to the retail investors as well.
So, my mantra is, never go for an IPO in the first place. And if you must, because your neighbor's son is making millions in IPOs, then just limit yourself to the public sector divestment offerings only. As for the private sectors ones, if you can wait for a few months, you may have them for a good 15%-20% discount.
