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Statistical Methods Case Study

Bhaskar Jain, 105


Abhimanyu Maheshwari, 109
Pranjal Saiwal, 115
The following figures give the frequency of the book- built IPOs in India with respect
to the year of issue and the issue size.
Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008

Number of
IPOs
18
51
114
7
6
14
23
79
77
85

Amount(Rs.
Cr.)
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595

Source: SEBI Annual Reports


Study the given data and identify the parameter of interest and plot the data. Find
the minimum and maximum value and form a frequency distribution with equal sized
class intervals. Calculate the Arithmetic Mean, Variance, Mode, Median, Measures of
Skewness and Kurtosis using the grouped as well as ungrouped data. Prepare a
relative frequency distribution using 10 classes of equal width. Also calculate the
expected value for the observations and plot the same. Based on the above analysis
comment on the characteristics of the data collected.

Parameters of Interest
Number of IPOs
Amount (Rs. Cr.)

Mean
Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total
Mean

Number of
IPOs
18
51
114
7
6
14
23
79
77
85
474
47.4

Mean(No. of IPOs) = (No. of IPOs)/(No. of Years)


=474/10
=47.4
Mean(Amount)

= (Total Amount)/(No. of Years)


= 103915.11
= 10391.511

Amount(Rs.
Cr.)
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595
103915.11
10391.511

Median
Median = L+ [ (N/2)-(C.F.) ]*i /F
Where,

L =lower limit of median class


N = no. of observations
C.F. = Cumulative Frequency of class preceding median class
F = Frequency of median class
i = class interval of median class

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total
Median Class is 2005-2006
L = 2005
N/2 = 237
C.F. = 233
F = 79
i=1
Median = 2005.05

y (Number of Cumulative
IPOs)
Frequency
18
18
51
69
114
183
7
190
6
196
14
210
23
233
79
312
77
389
85
474
474

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total
Median Class is 2006-2007
L = 2006
N/2 = 51957.55
C.F. = 32816.11
F = 28504
i=1
Median = 2006.67

Amount(Rs. Cumulative
Cr.)
Frequency
404.21
404.21
2719.04
3123.25
2722.38
5845.63
1201.8
7047.43
1038.68
8086.11
1412
9498.11
12382
21880.11
10936
32816.11
28504
61320.11
42595
103915.11
103915.11

Mode
Mode = Lmo + (d1/(d1+d2))*w
Where,

Mo = class with highest frequency


Lmo = lower limit of modal class
d1 = frequency of modal class-frequency of class below it
d2 = frequency of modal class-frequency of class above it
Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008

Mode(No. of IPOs)
Lmo = 2000
d1 = 114-7 =107
d2 = 114-51 = 63
Mode = 2000.63
Mode(Amount)
Lmo = 2000
d1 = 2722.38-1201.8 =1520.58
d2 = 2722.38-2719.04 = 3.34
Mode = 2000.99

Number of
IPOs
18
51
114
7
6
14
23
79
77
85

Amount(Rs.
Cr.)
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595

Variance

Variance = (1/N)* (x-)


Where,

N = number of observations
= Mean

Year
X
1998-1999
1998.5
1999-2000
1999.5
2000-2001
2000.5
2001-2002
2001.5
2002-2003
2002.5
2003-2004
2003.5
2004-2005
2004.5
2005-2006
2005.5
2006-2007
2006.5
2007-2008
2007.5
Total
Variance = 38243796.1/10

y
18
51
114
7
6
14
23
79
77
85
474

x-
1951.1
1952.1
1953.1
1954.1
1955.1
1956.1
1957.1
1958.1
1959.1
1960.1

(x-)2
3806791.21
3810694.41
3814599.61
3818506.81
3822416.01
3826327.21
3830240.41
3834155.61
3838072.81
3841992.01
38243796.10

x-
-8393.011
-8392.011
-8391.011
-8390.011
-8389.011
-8388.011
-8387.011
-8386.011
-8385.011
-8384.011

(x-)2
70442633.65
70425848.62
70409065.60
70392284.58
70375505.56
70358728.54
70341953.51
70325180.49
70308409.47
70291640.45
703671250.47

= 3824379.611
Standard deviation = (Variance)
= 3824379.611
= 1955.6
Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total

X
1998.5
1999.5
2000.5
2001.5
2002.5
2003.5
2004.5
2005.5
2006.5
2007.5

y
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595
10391.511

Variance = 703671250.47/10
=70367125.05
Standard deviation = (Variance)
= 70367125.05
= 8388.511

Measures of Skewness
Skewness is defined as:

Where,
X=data point
N=no. of observations
S = Standard deviation

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Skewness = 1.6699566

x
1998.5
1999.5
2000.5
2001.5
2002.5
2003.5
2004.5
2005.5
2006.5
2007.5

y
18
51
114
7
6
14
23
79
77
85

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Skewness = 0.4510708

Measures of Kurtosis
Kurtosis is defined as:

Where,
X=data point
N=no. of observations
S = Standard deviation

X
1998.5
1999.5
2000.5
2001.5
2002.5
2003.5
2004.5
2005.5
2006.5
2007.5

Y
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008

x
1998.5
1999.5
2000.5
2001.5
2002.5
2003.5
2004.5
2005.5
2006.5
2007.5

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008

x
1998.5
1999.5
2000.5
2001.5
2002.5
2003.5
2004.5
2005.5
2006.5
2007.5

18
51
114
7
6
14
23
79
77
85

Kurtosis = -1.365

Kurtosis = 2.0423428

404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595

Relative Frequency

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total

y
18
51
114
7
6
14
23
79
77
85
474

Relative
Frequency
0.03797
0.10759
0.24051
0.01477
0.01266
0.02954
0.04852
0.16667
0.16245
0.17932
1.00000

Cumulative
Relative
frequency
0.0380
0.1456
0.3861
0.4008
0.4135
0.4430
0.4916
0.6582
0.8207
1.0000

Year
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Total

y
404.21
2719.04
2722.38
1201.8
1038.68
1412
12382
10936
28504
42595
103915.11

Relative
Frequency
0.00389
0.02617
0.02620
0.01157
0.01000
0.01359
0.11915
0.10524
0.27430
0.40990
1.00000

Cumulative
Relative
frequency
0.0039
0.0301
0.0563
0.0678
0.0778
0.0914
0.2106
0.3158
0.5901
1.0000

Inferences

The table gives the frequency of the book- built IPOs in India with respect to the year
of issue and the issue size.
As it is evident from the table that the number of IPOs listed on National Stock
Exchange were quite less from the year 1999 to 2003 as compared to the number
listed on from the year 2004 to 2007. There were twenty IPOs in total from 1999 to
2003 whereas year 2004 alone witnessed the listing of twenty IPOs.
Afterwards the IPOs number has followed an increasing trend up to 2007. The
growth rate from the year 2004 to 2007 is 38.8%.whereas the growth rate from the
year 1999 to 2003 has a negative growth rate of 53.33%.
So we may say that the time frame from the year 1999 to 2003 represents a cold
issue market for the NSE while the time frame from 2004 to 2007 represents the hot
issue market.