International Journal of Financial Management

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Short-Run Performance of IPO Market in India


Affiliations
1 Department of Commerce, Delhi School of Economics, University of Delhi, New Delhi, India
2 Department of Commerce, Shaheed Bhagat Singh College, University of Delhi, New Delhi, India
     

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The main objective of this research paper is to examine the short run performance of IPOs by taking one-month performance. There exists a notion that the performance of IPO stocks has improved in the short run after going public. In this study, the data for short run analysis are taken for 30 days. We try to test the empirically the short run performance for a sample of 89 IPO firms that approached the market during the period 2006-09. We have calculated listing gain, short run gain, short run excess gain and Index growth.

We have used a logistic regression model to test the basic hypothesis, with the help of data on 89 IPOs, from the Indian stock market. The study uses prelisting information on which IPO pricing is based.

In this paper we have seen that many of the IPOs have significant returns on the day of listing but thereafter they do not give much return in the short-run, it shows that market overreacts to the initial public offers.


Keywords

Listing Gain, Short Run Gain, Determinants of Short Run Gain.
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  • Aktas, R., Karan, M. B., & Aydogan, K. (2003). Forecasting short run performance of initial public offerings in the Istanbul Stock Exchange.

  • Chen, G., Firth, M., & Kim, J. (2004). IPO underpricing in China’s new stock markets. Journal of Multinational Financial Management, 14, 283-302

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  • Short-Run Performance of IPO Market in India

Abstract Views: 238  |  PDF Views: 2

Authors

K. V. Bhanu Murthy
Department of Commerce, Delhi School of Economics, University of Delhi, New Delhi, India
Amit Kumar Singh
Department of Commerce, Shaheed Bhagat Singh College, University of Delhi, New Delhi, India

Abstract


The main objective of this research paper is to examine the short run performance of IPOs by taking one-month performance. There exists a notion that the performance of IPO stocks has improved in the short run after going public. In this study, the data for short run analysis are taken for 30 days. We try to test the empirically the short run performance for a sample of 89 IPO firms that approached the market during the period 2006-09. We have calculated listing gain, short run gain, short run excess gain and Index growth.

We have used a logistic regression model to test the basic hypothesis, with the help of data on 89 IPOs, from the Indian stock market. The study uses prelisting information on which IPO pricing is based.

In this paper we have seen that many of the IPOs have significant returns on the day of listing but thereafter they do not give much return in the short-run, it shows that market overreacts to the initial public offers.


Keywords


Listing Gain, Short Run Gain, Determinants of Short Run Gain.

References