A study of IPO listing returns in National Stock Exchange

Rajkumar Sharma, Amit Chaudhary and Navneet Gera

International Journal of Financial Markets and Derivatives, 2020, vol. 7, issue 3, 246-264

Abstract: The goal of this study is to analyse the IPO listing returns in National Stock Exchange (NSE) and provide insights for retail investors study has considered a sample of 463 IPOs listed in NSE from January 2000 to August 2018. Mean listing return has been found to be 20.10% which is abnormally high as compared to mean market return which is 0.24. Out of 463 IPOs 66.74% IPOs gave positive listing returns which means these IPOs were underpriced. But we cannot generalise that all IPOs are underpriced because 33.26% IPOs were overpriced and gave negative listing returns. This study provides a base for retail investor to formulate investment strategy. This study shows that by subscribing for all IPOs (over a period of 18 years) and selling them on listing day, a retail investor could have earned about 99% more returns as compared to market return and savings bank account return.

Keywords: initial public offering; IPO; listing return; under pricing; market return; National Stock Exchange; NSE; retail investor. (search for similar items in EconPapers)
Date: 2020
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