Volume : 1, Issue : 1, June - 2012

Initial and after Market Performance of Indian IPOs

Dr. Ashvin H. Solanki

Abstract :

This study examines the short and the long run performance of IPOs firms. It has been found that the initial returns of Indian IPOs is very high, which documents the existence of under pricing phenomenon in the Indian capital markets. These findings conform to the international evidence on under pricing; however the long run performance is not in line with the reported underperformance of IPOs firms. Long run underperformance has been found for a limited period only and if an investor holds IPOs stocks till the end of the fifth year from the date of listing, he would have earned more than the market returns.