Page 50 - 2018

was used to check IPOs underpricing in short run and underperformance in long run. For
the short and long run analysis, the raw return and market adjusted return were
segregated based on the categories of different issue specific, firm specific and market
specific variables and ANOVA was performed to know whether there is significant
variance in the returns generated by different categories of the respective variable.
Multiple regression technique was used to check the degree and direction of relationship
between the dependent variables (short and long run performance) and independent
variables (issue specific, firm specific and market specific variables). To identify the
determinants of the issue price of the IPOs, multiple regression was used considering 11
different firm and market characteristics. Independent sample t-test was used to examine
whether there is difference between the performance of stocks issued before and after
economic crisis.
Findings: Indian IPOs reported an average raw return of 24.34 percent, the average MAER
of 19.95 percent and WRi of 1.1995 on listing day, indicating IPOs outperforming
benchmark on the listing day during the study period.

For long run performance analysis based on issue price, raw return was positive
throughout the different time intervals. On the other hand, MAER was negative at the end
of three years of listing. There was no linear relationship between performance of IPOs
and time elapsed. For long run performance analysis based on closing price on listing day
indicates that MAER went into negative zone from two years of listing. Analysis indicates
that purchasing IPOs during offer from primary market and holding them for the long run
period is considered as a better option than purchasing IPOs on closing rate of listing day
and holding for long run period. Selling of shares on the first trading day is a good option
for securing higher return followed by selling at the end of one year of listing over the
study period.

Analysis of performance difference between IPOs and market return showed that there
was a significant difference between IPOs performance and NIFTY performance on the
listing day, after one week, one month, three months, six months and three years of
listing.

Analysis of performance evaluation with respect to different variables showed the
following results. IPOs with lower offer price have shown higher performance in short run
and long run. IPOs with lower listing delay have outperformed in long run as compared to
the IPOs having higher listing delays. IPOs with less number of uses mentioned in
prospectus, secured higher return in short and long run. Higher subscription during
offering gave better performance in short and long run. IPOs with lower offer size
performed better in short run. On the other hand, IPOs having higher offer size provided

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