*Department of Commerce, Delhi School of Economics, University of Delhi, India. Email: amitipo10@gmail.com
**Department of Commerce, Delhi School of Economics, University of Delhi, India. Email: ashween_anand10@outlook.com
Online published on 22 September, 2017.
This paper aims to evaluate a wide range of parameters like IPO listing gain, Nifty return, Sensex return, Nifty abnormal gain and Sensex abnormal gain. These measures reflect the extent of underpricing of Indian IPOs. Two measures of underpricing have been used: “simple” underpricing and “adjusted” underpricing. This paper also aims to analyze the correlation between listing gain, Nifty return, Sensex return, Nifty Abnormal gain and Sensex abnormal gain. For this purpose, Karl Pearson?s Correlation Coefficient has been used. Taking a sample of 33 book-built IPOs that came to the market during 2013 to 2016, it is found that the average "simple? underpricing is 10.79%. The average "adjusted? underpricing comes out to be 11.77% taking Nifty index and 11.86% taking Sensex index. Thus, underpricing still continues to be an issue of concern.
Initial public offering, Underpricing, Book-building, Risk-return tradeoff, Sensex
