Research Scholar,
Most widely view of investors in Initial Public Offerings (IPOs) is underpriced. However, literature including international studies witnessed IPOs underpriced in short run and overpriced in long run. While investor expects only positive returns from their each investment and therefore, knowledge and understanding about IPOs in short and long run is required. This study aimed at long run performance of select Indian IPOs. Total sample of n=50 from population 373 was finalized which are large volume and actively traded on National Stock Exchange (NSE) from the period of 2006–2011 was considered.
From the analysis using Wealth relative and BHAR computation it is clear that highest gains observed in Finance-Term Lending Institutions sector among select sectors whereas, highest losses observed in Real Estate, Construction & Contracting sector.
There is a difference in the calculated values of Wealth relatives and BHAR. However, these values indicate same sign (Positive/Negative) in the results but calculated values of same IPO using BHAR observed with higher value than Wealth Relative.
Initial Public Offering, NSE, Overpricing
