IPOs in INDIA: A decade analysis for IPOs average return

Ashwin Gedam

Abstract

Ever since the people of India got an alternative investment opportunity, stock market has been proven as a best investment venture for the passionate Indian investors. Some people call stock market investment a gamble but for the wise investors it is like a gold mine for generating wealth. Investing in initial public offerings (IPOs) represents one of the finest ways to benefit from stock market investing. IPOs give investors a chance to reap benefits of a new share when it has only begun its life on the share market. IPOs are not new in India, but over a decade they are in demand like ‘hot cakes’ in securities market. Whether people understand the working of IPOs or not, but they still want to bet on their favourite IPOs to make an instant gain. This paper studied IPOs issuance v/s listing price over a decade and tried to calculate the average return these IPOs have returned. For instance, if a person invested in all IPOs at their issuance price and taken out all the money at their listing price, and if he or she have done this over a decade then the average returned obtained is seen. The present paper makes an earnest attempt to understand the working of IPO in Indian securities market with respect to their average return.