The present study intends to examine the price performance of the Indian IPOs listed on NSE, using a sample of IPOs that tapped the NSE market during 1999-2008 by takingin consideration of their prices. The short run as well as long run analysis of their price performance have been done by taking the gap of time intervals of 1 weak, 1month,3months, 6months and 1year, 2years, 3years respectively. In addition to that ananalysis has been conducted to know the influence of the factors viz. subscription level,Issue size, Listing Lead time and Age, on the price performance of the IPOs. The studyshows that underpricing is present in the Indian Capital market. Also, underpricing ismore prevalent in the short run than in the long run. The study further shows that IPOscome to their intrinsic value over a period of time. The regulatory framework of IPOswith special reference to SEBI guidelines has also been done.
IPO ACTIVITY IN INDIAN STOCK MAERKET
IPO market in India has seen many ups and down during the last decade. It has seen a steeprise in the initial years of the post liberalization. The Growth observed during the first half of the 90s is mostly attributed to the financial liberalization of the economy. Capital marketreforms like abolition of the office of controller of capital issues (CCI), constitution of SEBIunder the new security and regulation act and relaxation in pricing of capital issues played animportant role in such upsurge. Table1 show that IPO market has witnessed an explodinggrowth from 158 issues during 1991-1992 amounting to Rs. 724 crore to 1357 IPOs for Rs.10924.11 crore during 1995-1996.There was a marked decline in the number of IPOs and amount raised through them in 1996-1997, largely as a result of stricter eligibility criteria for public issues imposed by SEBI. Thenumber of IPOs declined to 717 amounting to Rs. 5958.60 crore during 1996-1997 (AnnualReport, SEBI, 1996-97). The number of IPOs further declined in 1997-98 to 52 amounting toRs1047.52 crore. The decline in the share of IPOs can be partly attributed to the decline inindustrial activity in the country and partly due to strict entry point norms, which preventedgreen field projects without track record from accessing the market (Annual Report, SEBI,