Shanlax International Journal of Management
  • Year: 2024
  • Volume: 11
  • Issue: 3

Short-Term Performance of Indian Initial Public Offerings (IPOs)

1Assistant Professor, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India

2Associate Professor, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India

3Professor and Dean, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India

*K. Manjula, Assistant Professor, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India, Email ID: manjulak@sjec.ac.in

**Babitha Rohit, Associate Professor, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India, Email ID: babitha.rk2002@gmail.com

***Prakash Pinto, Professor and Dean, Department of Business Administration, St Joseph Engineering College, Mangaluru, Karnataka, India, Email ID: prakashpinto74@gmail.com

Online Published on 01 March, 2024.

Abstract

The pricing of IPO’s in the short-term has been analyzed by several theoretical and empirical studies referring to the world’s major stock markets. Studies have also observed that IPOs cause increase in price considerably on the first day of trading and provide huge returns to investors who buy at the initial offer price and sell immediately in the secondary market. This research presents the results of the analysis related to the short-term performance of the Indian IPOs under study. Event study methodology is used to analyze the short term performance of IPOs from January 2016 to December 2022 issued in Bombay Stock Exchange (BSE), India. The average positive return on the listing day is 18.5 percent which indicates that the IPOs are underpriced.

Keywords

Initial Public Offer, Market Adjusted Abnormal Return, Listing Returns, Abnormal Returns, Wealth Relative, Pricing Behaviour