First of all understand what is an IPO and why company lunch IPO.
As you know IPO is Initial Public offer,
Suppose a company XYZ limited need some money to extend their business or organisation. They can get money from various sources like bank loan, mutual fund house, venture capital and they can come to the public directly.
Taking money from direct public is known as the IPO.
It means as a retail investor you give some money ( buy some shares of that company) and you become the share holder of that company.
Now come to the investor part-
Whether it is a good investment or not?
It all depend upon the performance of company, product or service of company and the good will and future of company.
For example in 2016 lots many company lunched their IPO like RBL bank, L&T infotech, Ujjian financial services, Mahanagar gas etc who has given almost 20% profit on the day of listing.
How to apply for an IPO-
You need a demat account and a savings bank account.
You can apply either online through your bank web site or can apply offline, by filling a form , just your name, contact details, bank account number, ifsc code etc.
They have set a minimum price band and minimum lot size which almost come with in RS7000-12000 or littel bit higher.
After end of their subscription with in 5-7 days it get listed either in NSE or BSE and you can sell if you get a good profit or can hold for long term profit to enjoy the dividends and bonus.