Ph.d Research Scholar, Kanchi Maamunivar Centre for PG Studies, Puducherry
JEL Classification: G24, D53, D81, C12, C14, G24
This paper examines the price performance of Initial Public Offerings (IPOs) in India. The study was conducted among 27 book building IPOs in India comprising of a period of five years from 1990 to 2004. All the issues were priced at premium. Since all are premium issues, they were categorized as low premium IPOs and high premium IPOs. Low premium IPOs were taken as those whose issue price is five times the face value of its shares and High premium IPOs were those whose issue price is ten times the face value of their shares. The sample comprised 5 low premiums and 22 high premium IPOs. For the purpose of the analysis, Shapiro Wilks “W” test and Mann Whitney “U” test were conducted. The study shows that there is no much difference between low and high premium issues, and suggests that mostly low premium issues are under priced and are more consistent as regards to returns than that of the high premium issues.
Initial Public Offerings, premium issues, underwriting, mean returns, book building, investment banking, initial market returns, aftermarket returns, bull market, bear market, annualised returns
