Post-Issue Performance of IPOs in India

International Journal of Financial Management, Volume 3 Issue 1 January 2013, pp 19-30 (ISSN 2229-5682).

12 Pages Posted: 10 Apr 2013

See all articles by Sudesh Kumar Sharma

Sudesh Kumar Sharma

Sinhgad Institute of Management & Computer Application; Sinhgad Institute of Management

Sanjiv Mittal

Guru Gobind Singh Indraprastha (GGSIP) University - University School of Management Studies

Naresh Gupta

University of Delhi

Date Written: November 11, 2012

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

JEL Classification: G10, G12, G14, G15

Suggested Citation

Sharma, Dr. Sudesh Kumar and Mittal, Sanjiv and Gupta, Naresh, Post-Issue Performance of IPOs in India (November 11, 2012). International Journal of Financial Management, Volume 3 Issue 1 January 2013, pp 19-30 (ISSN 2229-5682)., Available at SSRN: https://ssrn.com/abstract=2245410

Dr. Sudesh Kumar Sharma (Contact Author)

Sinhgad Institute of Management & Computer Application ( email )

Sinhgad Narhe Technical Campus, Narhe-Dhayari Road
Ambegaon Budruk
Pune, Maharashtra, Maharashtra 411041
India
9960290601 (Phone)

Sinhgad Institute of Management ( email )

Pune, Maharashtra 411041
India

Sanjiv Mittal

Guru Gobind Singh Indraprastha (GGSIP) University - University School of Management Studies ( email )

New Delhi, 110065
India

Naresh Gupta

University of Delhi ( email )

India

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