Underpricing of Select NSE-listed IPOs in India with Respect to Differences in Issue Size: An Empirical Analysis

Abstract

Initial Public Offerings (IPOs) play an essential role of capital formation in the primary capital market. The interested investors subscribe to the IPOs at their issue price. There are many factors influencing the price performance of IPOs. Considering this, the current study analyses the first day price performance of IPOs on the basis of the issue size of the IPOs. The study examines the various measures of first day returns on the basis of the different groups formed considering differences in issue size for the sample IPOs companies. Such measures of average returns are tested for statistical significance with the help of one-sample t-test.

Keywords: Capital formation, Initial Public Offerings (IPOs), Initial Returns, MAAR, Underpricing, Issue size

DOI: 10.7176/EJBM/15-1-02

Publication date: January 31^st 2023