Title: A study of IPO listing returns in National Stock Exchange

Authors: Rajkumar Sharma; Amit Chaudhary; Navneet Gera

Addresses: Bharati Vidyapeeth Institute of Management and Research (BVIMR), A-4, Rohtak Road, Paschim Vihar, New Delhi-110063, India ' Bharati Vidyapeeth Institute of Management and Research (BVIMR), A-4, Rohtak Road, Paschim Vihar, New Delhi-110063, India ' Bharati Vidyapeeth Institute of Management and Research (BVIMR), A-4, Rohtak Road, Paschim Vihar, New Delhi-110063, India

Abstract: The goal of this study is to analyse the IPO listing returns in National Stock Exchange (NSE) and provide insights for retail investors study has considered a sample of 463 IPOs listed in NSE from January 2000 to August 2018. Mean listing return has been found to be 20.10% which is abnormally high as compared to mean market return which is 0.24. Out of 463 IPOs 66.74% IPOs gave positive listing returns which means these IPOs were underpriced. But we cannot generalise that all IPOs are underpriced because 33.26% IPOs were overpriced and gave negative listing returns. This study provides a base for retail investor to formulate investment strategy. This study shows that by subscribing for all IPOs (over a period of 18 years) and selling them on listing day, a retail investor could have earned about 99% more returns as compared to market return and savings bank account return.

Keywords: initial public offering; IPO; listing return; under pricing; market return; National Stock Exchange; NSE; retail investor.

DOI: 10.1504/IJFMD.2020.109183

International Journal of Financial Markets and Derivatives, 2020 Vol.7 No.3, pp.246 - 264

Received: 13 Feb 2019
Accepted: 14 Jan 2020

Published online: 17 Aug 2020 *

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