Factors Influencing Underpricing of Manufacturing sector IPOs: An Indian Perspective

IPO has been one of the most popular routes chosen for raising funds by any growing company. It is a common experience that many IPOs are underpriced. This paper attempts to find out the factors which influence the underpricing decision. Earlier researchers had found that the influence of financial factors like ownership retention, size of the issue, age of the firm, Debt-equity ratio, NAV, EPS, and non-financial factors like Underwriter's reputation, Venture capital funding, IPO-grading. An attempt is made to find out if Net-worth to Total Assets, Return on Net-worth, Qualified Institutional Buyers allotment, Green-shoe option also would influence the degree of underpricing of IPOs in the Indian context. Data relating to 2003 to 2017 have been studied with reference to the Manufacturing Sector.