Evaluation of Ipos performance in India: An empirical study

The Initial Public Offers (IPO) has become one of the most preferred investments option for the investors nowadays. It is a very lucrative investment option which does not only provide the initial gain at the time of listing but also provide higher amount of return (especially for long term retail investors) when compared with the other secondary market securities. It can be said that the interests of IPO investors are generally influenced by the current market trend and this in turn influence the performance of the IPOs. This paper attempts to assess the performance of 95 IPOs introduced during 2011–2016 on NSE. The paper shows the analyses of listing day gain and 1-month returns. It was analyzed that on an average 10.95% of day listed gain earned by these IPOs whereas these IPOs posted a very few gain of 4.63% in case of short run performance as one-month return. Out of 95 IPOs introduced on NSE, (61) 64.21% were underpriced and (33) 34.74% overpriced and there was only one IPO whose issue price was not different from the listing price.