1Professor & Head, Department of Commerce and Business Administration, P.B. Siddhartha College of Arts & Science, Siddhartha Nagar, Vijayawada, Andhra Pradesh, Pin-520010, Cell: +91 98668 06069. Email: rajeshjampala@yahoo.com
2Professor & Head, Department of Business Administration, P.V.P. Siddhartha Institute of Technology, Kanuru, Vijayawada, Andhra Pradesh, Pin: 520 007, Phone: +91 94913 48818, lakshmi_jampala@yahoo.com
3Assistant Professor, P.V.P. Siddhartha Institute of Technology, Kanuru, Vijayawada, Andhra Pradesh, Pin: 520007, Phone: +91 98853 44115, srinu_dokku@yaoo.co.in
Online published on 15 February, 2019.
This paper analyses the short-run and long-run performance of initial public offerings (IPOs) in the Indian capital market. The sample comprises of 146 IPOs listed on the National Stock Exchange between 2007 and 2008. The analysis reveals that the IPOs have under performed both in short-run as well as long-run, registering negative returns of 8.41 and 38.44 respectively. It is also found that there is a significant difference between issue price and market performance of IPOs during the study period. 54 per cent of the sample companies have under performed from the first day of listing and around 80 per cent have recorded negative returns in long-run. It analyses the stock performance by considering the issue price, market capitalization, etc., However, the study doesn't specify the reasons for underperformance in short-term and long-term and also it has not considered other factors like, stock market performance, sales, profits, etc. on stock returns.
IPOs, Returns, under pricing, Underperformance
