An Empirical Study on Short-Run Performance of IPO Stocks on NSE for the Period 2010-2020.

Abstract

An Initial Public Offer (IPO) always gains the attention of market participants - whether retail or institutional investors. Securities can be sold either through book building or through fixed price - for each informational efficiency is pertinent. IPO under-pricing and overpricing is cause for much speculation about where share price will head in the future. Portfolio strategies depend on robust stock price predictions. This current study tries to review the IPO listing in India for the past 11 years from 2010-2020 to evaluate the brief presentation regarding 50 IPO that featured during the study period. This Research assesses impact of size of the issue, firm's age and listing price as key attributes that could impact short term stock performance. Using t-test the study concludes that under-pricing or over-pricing of a stock has some predictive value as under-priced stock rise in the stock market with every successive period, while the over-priced stocks tumble and under-perform.