A Study on the Long-Run Performance of Initial Public Offerings in India
Bhatia, S. and Singh, B. (2010). A Study on the Long-Run Performance of Initial Public Offerings in India, Journal of Managerial Finance and Research, 6 (2)
23 Pages Posted: 3 Mar 2017
Date Written: December 3, 2010
This paper examines the long run performance of 438 initial public offerings in India that got listed on the Bombay Stock Exchange from 1992 to 2001. It further attempts to identify the factors explaining the long-run performance of IPO firms. The cumulative abnormal return at the end of fifth year is 184.64% which is very high in contrast with the returns observed in the developed countries. Substantial variations have been observed across firms belonging to different age groups and industries. Variations in performance of IPO firms is also evident when firms are segmented according to their initial returns, issue price and issue size. Initial returns, issue size and market conditions primarily explain variations in long run performance of Indian IPOs.
Keywords: Initial Public Offerings, Underperformance, Long-Run Performance, Aftermarket Performance
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