Abstract:

Purpose: (a) To ascertain the IPO’s listing gain or loss and analyse the post IPO’s performance. (b) To analyse the impact of IPO subscription ratio, IPO lead manager’s (BRLM), sponsor bank’s and IPO registrar’s reputation on the listing gain or loss. Design/ Methodology/Approach: It is an analytical research, that also uses event study for the analysis of data. All the 16 IPO’s listed in the NSE (National Stock Exchange, India) during the year 2019 were considered for the study. The study is based on secondary data. The daily share price and Nifty-50 index value has been obtained from NSE website (www.nseindia.com) and other relevant data from red-herring prospectus of the respective company. The research / statistical tools used are ANOVA, multiple regression, correlation, covariance. Scope of the study: The scope of the study is limited to the IPO’s listed only in the National Stock Exchange (NSE), India. Period of study: The study covers a period from January 2019 to December, 2019. Limitation of the study: The study considers only the influence of the external factors on the performance of IPOs. Findings: The analysis reveals that 68.75% of the IPO’s have given a listing gain and in that only 43.75% of the IPO’s have given listing gain more than 10% during the year 2019. The analysis clearly reveals that 68.75% of the IPOs were underpriced and 31.25% of the IPOs were overpriced. The abnormal return of only 56.25% of the IPO’s were found to be significant on the listing day. The CAR was positively significant for only 56.25% of the IPO’s. The CAAR of all the IPO’s listed during the year 2019 was significant only on the first four trading days and the same has gradually disappeared by the end of 30 trading days. The subscription ratio of QIB has very high degree positive influence followed by RII on the listing gain and the subscription ratio of HNI has negative influence on the listing gain. The analysis shows that the Book Running Lead Manager (BRLM), the sponsor banks and the registrar of the IPO issue have no significant influence on the listing gain or loss. Originality / Value: This is an original work that analyses the listing gain or loss and the post listing performance of IPO’s in India and other factors that might influence the listing gain or loss.