A Study of Perception of Retail Investors’ of Surat City About Factors Affecting Primary Market Mechanism in India

Joshi, M. C., & Chawla, D. (2015). A Study of Perception of Retail Investors' of Surat City about Factors affecting Primary Market Mechanism in India. In A. Palnitkar, K. Baddade, & B. Dayma (Ed.), A Paradigm Shift in Indian Business Environment (pp. 49-59). Latur: Vidhyabharti Prakashan.

9 Pages Posted: 18 Sep 2014 Last revised: 13 Sep 2015

See all articles by Mrunal Joshi

Mrunal Joshi

B.R.C.M. College of Business Administration

Divya Chawla

BRCM College of Business Administration

Date Written: June 30, 2014

Abstract

The primary market is that part of the capital markets that deals with the issue of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. With the reforms of industrial policy, public sector, financial sector and the many developments in the Indian money market and capital market, primary market which has become an important gateway for the retail investors to make their investment, is also influenced by various factors. Hence, this study has made an attempt to find out the perception of retail investors about factors influencing Indian primary. This study is based on primary data collected through a well designed structured questionnaire from 175 retail investors from Surat City. In this study it has been observed that the most important factors while investing in Primary Market according to Investors are Company’s Goodwill, Current Financial Position of company, Corporate Profile, Government holding in company and Promoters stake in the company. While the least important factors are Size of the IPO Issued, Disclosure by market participants and Minimum Investment amount required. The study reveals that retail investor’s opinion is similar on majority aspects relevant to IPOs. Saving ratio of investors is only demographic factor affecting perception of retail investors about various factors affecting primary market. SEBI is already alert about few issues immerging in primary market though few problems related to IPOs were unfolded during the study. Major problems out of the mentioned are Refund related Problems, Delay in allotment of shares and Lack of Transparency.

Keywords: Investment decision, Primary Market, Retail Investors

JEL Classification: G29

Suggested Citation

Joshi, Mrunal and Chawla, Divya, A Study of Perception of Retail Investors’ of Surat City About Factors Affecting Primary Market Mechanism in India (June 30, 2014). Joshi, M. C., & Chawla, D. (2015). A Study of Perception of Retail Investors' of Surat City about Factors affecting Primary Market Mechanism in India. In A. Palnitkar, K. Baddade, & B. Dayma (Ed.), A Paradigm Shift in Indian Business Environment (pp. 49-59). Latur: Vidhyabharti Prakashan. , Available at SSRN: https://ssrn.com/abstract=2494915 or http://dx.doi.org/10.2139/ssrn.2494915

Mrunal Joshi (Contact Author)

B.R.C.M. College of Business Administration ( email )

V.T.Choksi Campus, Lal Bunglow
Athwalines
Surat, Gujarat, 395007
India
02612257340 (Phone)

HOME PAGE: http://www.joshimrunalbrcm.blogspot.in

Divya Chawla

BRCM College of Business Administration

V.T. Choksi College Campus
Surat, Gujarat, 395001
India

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