International Journal of Financial Management

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Post-issue Performance of IPOS in India


Affiliations
1 Sinhgad Institute of Management, University of Pune, Pune, India
2 USMS, Guru Gobind Singh Indraprastha University, New Delhi, India
3 Ramjas College, University of Delhi, New Delhi, India
     

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Initial Public Offers (IPOs) market is considered to be the safest way to invest in the stocks and it also assures profits due to underpricing. Therefore, it attracts every type of investors and very particularly the retail investors. However, gaps do appear in perceived profits and the actual profits. Expectations have been built around some sector stocks such as Public sector - considered as safe bet; Petrochemical and Infrastructure sector stocks - for assured long term appreciation; Finance and IT sector for quick profits, etc. This study is an attempt to capture the performance of IPOs across different sectors, over different time frames, to identify the performing sectors and the effect of the non-performing IPOs. Our results indicate that public sector stocks outperform all other sector stocks during short as well as long term period. Manufacturing sector stocks appear to be least performing stocks during short as well as long term duration. Further, if non-performing IPOs could be checked out, there would be substantial gains for the investors. We expect our study to serve as a guiding tool for retail investors to enable them to focus their investments.

Keywords

IPO Market, Market Appreciation Analysis, Underpricing, Non-Performing IPOS, Retail Investors
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  • Post-issue Performance of IPOS in India

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Authors

Sudesh Kumar Sharma
Sinhgad Institute of Management, University of Pune, Pune, India
Sanjiv Mittal
USMS, Guru Gobind Singh Indraprastha University, New Delhi, India
N. K. Gupta
Ramjas College, University of Delhi, New Delhi, India

Abstract


Initial Public Offers (IPOs) market is considered to be the safest way to invest in the stocks and it also assures profits due to underpricing. Therefore, it attracts every type of investors and very particularly the retail investors. However, gaps do appear in perceived profits and the actual profits. Expectations have been built around some sector stocks such as Public sector - considered as safe bet; Petrochemical and Infrastructure sector stocks - for assured long term appreciation; Finance and IT sector for quick profits, etc. This study is an attempt to capture the performance of IPOs across different sectors, over different time frames, to identify the performing sectors and the effect of the non-performing IPOs. Our results indicate that public sector stocks outperform all other sector stocks during short as well as long term period. Manufacturing sector stocks appear to be least performing stocks during short as well as long term duration. Further, if non-performing IPOs could be checked out, there would be substantial gains for the investors. We expect our study to serve as a guiding tool for retail investors to enable them to focus their investments.

Keywords


IPO Market, Market Appreciation Analysis, Underpricing, Non-Performing IPOS, Retail Investors

References