1. Dr. Omprakash Kajipet
Professor & Head
Department of Commerce and Business Management
Kakatiya University, Warangal, AP
2. A.Sathish Kumar
Sree Chaitanya PG College
LISTING DAY PERFORMANCE OF INDIAN IPOs
Investment would imply the employment of funds with the objective of realizing additional income or growth in value of investment at a future date. Investment choices are found to be the outcome of three different but related classes of factors like factual, expectation and valuation. Financial investment is an exchange of financial claims like stocks and bonds.
Most popular financial investment is equity shares. Equity is the ownership capital of a company. To invest in equity shares of a company investors have two markets through which they can invest. The two markets are primary market and secondary market. Primary market also known as New Issue Market which deals with new securities i.e., securities that are offered to the investing public for the first time by the company. The most important method to market the security of a company in the new issue market is public issue. When a company is new and has to raise huge funds it has to go in for public issue.
IPO ERA – INVESTORS’ DILEMMA:
Over the past ten years almost 300 companies have collectively gathered more than Rs.132000 crore in the capital market through New Issue Market i.e., Initial Public Offerings. However, the long term track record of IPOs in the Indian market suggests that a large proportion of them do not deliver on the initial promise. According to an analysis one out of every two Initial Public Offer stocks still trades below it issue price, even after the market recovered strongly.
An investor can neither decide the timing of an IPO nor its pricing. The question therefore, is whether at all he should invest in it. If so, fundamentals did matter in how IPO stocks fared...