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better return in long run. Public sector firms’ IPOs performed better than private sector
firms’ IPOs. Middle age firms performed better on listing day. But lower age firms
performed better in long run. Lower post issue promoter hoding performed badly in long
run than higher post issue promoter hoding in IPOs. Higher total assets lead to higher
performance in the long run. IPOs having higher profit secured higher return in short and
long run. Higher the sales growth, better the performance in short and long run. For IPOs
issued during higher activity time, return would be lower in short and long run. IPOs
issued during 2008 provided negative performance for all the time intervals. IPOs issued
during hot climate period performed better compared IPOs during cold climate period.

Analysis of factors affecting IPOs, listing day performance showed that independent
variables, e.g., offer price, subscription level, age of firm, total assets, profit, hi-technology
firms , public sector firms, IPO activity time, inflation, market return for corresponding
period collectively explained the variation in listing day raw return by 38.99 per cent. The
main factors having significant positive relationship with raw return on listing day were
times subscribed, inflation, and market return. The factors having significant negative
relationship with raw return on listing day were offer price, total asset, hi technology
industry and IPO activity level.

For determinants of long run performance, different set of variables considered based on
backward multiple regression analysis, collectively explained the variation in raw return at
different time intervals and was found to be significant. Offer price and IPO activity time
were having a negative significant relationship with raw return whereas market return for
respective time duration showed positive effect on raw return for all the time intervals in
long run. Subscription level was having positive significant relationship up to six month of
listing and afterwards negative significant relationship to raw return from one year of
listing. The negative value of regression coefficient between raw return and subscription
suggests that initial zeal for IPO fails to continue in long run. Uses mentioned in
prospectus showed positive significant relationship with raw return only after one year
and two year of listing. Market climate showed positive significant relationship with raw
return after three months, one year, two years and three years. Inflation indicated positive
significant relationship with raw return except for one month and two years of listing.
Leverage had negative significant relation with raw return for different time intervals after
three years of listing.

Only 133 IPOs were graded during 2002-2015 and more number of issues were in the
grade 3 category. IPO Grade 1 reflected highest level of underpricing at 29.625 percent,
however, contrary to expectations; Grade 5 with 17.201 percent was second highest. Only
IPOs having grade 5 or 4 have shown positive raw return at different time intervals during
the study period. It can be concluded that better the grade higher the performance in long
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