Comparative Analysis of Underpricing and Subscription of SME IPOs and Main Board IPOs in India

Published in Our Heritage, Vol. 68, Issue 27, 2020. UGC Care Listed (ISSN 0474-9030)

17 Pages Posted: 27 Mar 2020 Last revised: 19 Aug 2021

See all articles by Sudesh Kumar Sharma

Sudesh Kumar Sharma

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

Makarand S. Wazal

affiliation not provided to SSRN

Date Written: February 6, 2020

Abstract

SME (Small & Medium Enterprises) IPOs formally debuted in India in 2012 when BSE and NSE introduced SME Platform on their exchanges along with Main Board Platform (for non-SMEs). SEBI has eased the listing criteria for SMEs to make it more attractive. The focus of this study is to assess and compare efficiency of SME IPOs with respect to Main Board IPOs in terms of price discovery using underpricing analysis. The study is based on sample of 1110 IPOs which comprises 526 SME IPOs and 584 Main Board IPOs that got listed on BSE, NSE and on their SME Platform during the period 2000 to 2019. Outcome of this analysis suggests that SME IPOs are more efficient in terms of underpricing. Further, the demand levels in case of SMEIPOs are lower compared with their counterparts, even though the probability of listing day gains is high. This study will provide insight to the policymakers, investing community, issuers and also add to the body of the knowledge on SME IPOs which is still at the nascent stage amongst the research community.

Keywords: IPOs, SME, Underpricing, Subscription, Efficiency

JEL Classification: G11, G14, G15, G18, G32

Suggested Citation

Sharma, Dr. Sudesh Kumar and Wazal, Makarand S., Comparative Analysis of Underpricing and Subscription of SME IPOs and Main Board IPOs in India (February 6, 2020). Published in Our Heritage, Vol. 68, Issue 27, 2020. UGC Care Listed (ISSN 0474-9030), Available at SSRN: https://ssrn.com/abstract=3547863 or http://dx.doi.org/10.2139/ssrn.3547863

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

Makarand S. Wazal

affiliation not provided to SSRN

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