Pricing and Performance of IPOs: Evidence from Indian Stock Market

Cogent Economics & Finance, January 2018, Vol. 6, No. 1 pp. 1-20. DOI: 10.1080/23322039.2017.1420350.

20 Pages Posted: 2 Jan 2020

See all articles by Iqbal Thonse Hawaldar

Iqbal Thonse Hawaldar

Kingdom University

Naveen Kumar K.R.

affiliation not provided to SSRN

T. Mallikarjunappa

Mangalore University

Date Written: January 12, 2018

Abstract

This study examines listing day performance of IPOs, book-built and fixed-price IPOs, post-listing aftermarket performance of IPOs, book-built and fixed-price IPOs in the Indian stock market. We examine pricing as well as long run performance of 464 (365 book-built IPOs and 99 fixed-price IPOs) Indian IPOs that went public between 2001 and 2011. The study covers 15 years from the financial year 2001 to 2015. Analysis of the results reveals that compared to fixed-price IPOs, book-built IPOs are underpriced by lesser magnitude. Moreover, book-built IPOs are associated with negative cumulative average abnormal returns (CAARs) up to five
years and beyond, the negative CAARs associated with fixed-price IPOs turn positive after one and one-half year and continue to be positive thereafter.

Keywords: IPOs; underpricing of IPOs; underperformance of IPOs; book-building of IPOs; fixed-price IPO

JEL Classification: G10; G12; G32

Suggested Citation

Hawaldar, Iqbal Thonse and K.R., Naveen Kumar and Mallikarjunappa, T., Pricing and Performance of IPOs: Evidence from Indian Stock Market (January 12, 2018). Cogent Economics & Finance, January 2018, Vol. 6, No. 1 pp. 1-20. DOI: 10.1080/23322039.2017.1420350. , Available at SSRN: https://ssrn.com/abstract=3504459 or http://dx.doi.org/10.2139/ssrn.3504459

Iqbal Thonse Hawaldar (Contact Author)

Kingdom University ( email )

Sanad
Bahrain

Naveen Kumar K.R.

affiliation not provided to SSRN

T. Mallikarjunappa

Mangalore University ( email )

Mangalagangotri
Mangalore - Dakshina Kannada
Mangalagangothri - 574 119, D.K. Karnataka 574199
India

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