INITIAL PERFORMANCE OF IPO’S AGAINST NIFTY, BSE-SENSEX & IPO INDEX
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Abstract
This paper is an attempt to check whether IPO’s bring any investment opportunities to the investors to make some quick returns and also to check whether the stocks are overpriced or under-priced on the listing day and to compare the returns of IPO with leading index of the country.
For the purpose of the study only those companies which went for IPO during January to December 2016 were considered and in order to check whether IPO’s gave positive or negative returns, the performance of each stock were measured in terms of returns generated by them on the listing date. A total of 80 companies went for IPO during the calendar year 2016. From the analysis it is observed that the performance of IPO’s during the year is satisfactory and only 10 companies out of 80 companies gave negative returns on the listing day. The study also compared the returns of IPOs with Sensex, Nifty and IPO index for a period of one and two years, and it was found that IPO’s has given higher returns in both the years when compared to Nifty, Sensex and IPO index. There is an increase in the number of IPO’s during the year when compared to IPO’s of the previous years. The increase in IPO’s is a good sign for the development of the economy and positive returns of majority of stocks on listing day is a good sign for investors to make some quick returns.
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