MASTER THESIS REPORT

A study of various factors affecting an IPO in long

run – quantitative study

A Report submitted in partial fulfilment of the requirements for the degree of

MBA

SUBMITTED BY

Nehal Sharma - 2027244

SUBMITTED TO

Prof. Harshita Moulya

MBA PROGRAMME
SCHOOL OF BUSINESS AND MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

JANUARY 2022

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 Index

Particulars Pg no
Introduction 3–5
Introduction of dependent and independent 5 -6
factors
Literature review 6-8
Research questions 8
Data sources 9
Research methodology 9-10
Research design 10
data source and hypothesis 10-14

Literature review 14 - 21

Analysis and results 21-25

Suggestions and conclusion 25-27

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About IPOs

In India and around the world, IPOs (initial public offerings) increased in 2021. According to
the Ernst & Young Global IPO Trends Report for 2021, 2,388 IPO deals raised $453.3 billion
globally in 2021, up 60% from 2020 in terms of volume and proceeds. In India, 63 firms
raised a total of $1.19 trillion through initial public offerings, more than four times the
amount raised in 2020 (26,628 crore). Furthermore, an IPO's goals are 'general purpose,'
which implies that investors will have no way of knowing how the money would be used by
the company. To address these concerns, the Securities and Exchange Board of India (Sebi)
has enacted regulations, including a limit on OFS by existing shareholders and a prohibition
on using IPO funds for acquisitions unless the target is mentioned in the prospectus.

New-age technological start-ups, a sustained low-interest rate environment, robust retail

involvement, and India's economic storey are all key drivers of the IPO market in India. A
significant portion of the money raised through IPOs (75,736 crore) went to Offer for Sale
(OFS), which is a cause for concern.

The Price Discovery Process

An initial public offering, rights issue, or private placement are all ways for companies to
raise money in the primary market. The selling of securities to the general public on the main
market is known as an Initial Public Offering (IPO). The fixed price approach, book building
method, or a combination of both can be used for this Initial Public Offering.

The following are the differences between shares offered through book building and shares
offered through a regular public offering:

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Allotment

This is the method by which applicants are assigned (allotted) shares. The bids are then
assigned to the various categories, and the over-subscription (the number of shares applied
for vs the number of shares offered) in each category is calculated. Retail investors and high-
net-worth individuals are given proportional allotments. For example, if a retail investor
applies for 200 shares in an issue and the issue is five times over-subscribed in the retail 6
category, the retail investor will receive 40 shares (200 shares/5). Occasionally, there is such
a large over-subscription or the issue is priced so high that ordinary investors are unable to
bid for more than 50,000 shares before the Rs 50,000 limit is reached. Allotments are used in
these situations. On the basis of a lottery, decisions are made. Let's say a retail investor has
applied for five shares in a public offering, and the retail category has been ten times
oversubscribed. A half-share is available to the investor. Since this isn't achievable, it's
probable that every 1 in 2 retail stores will be closed.

Allotment will be given to investors. The investors are subsequently chosen by lottery, and
the offering is launched.

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On a proportional basis, allotments are made. As a result, there's no way to know if you'll get
an offer allotment

Introduction

An initial public offering (IPO) is when a private company's shares is offered to the public for
the first time. Smaller, younger companies are more likely to conduct initial public offerings
(IPOs) in order to raise funds to grow their operations. Companies do have alternative options
for financing, such as retaining earnings or borrowing from a bank Loans, overdrafts, and
other forms of credit are available, although equity shares are the primary source of capital.
Factors have an impact on Because IPOs have a negative side, they require the participation
of all investors and companies. As a result, the research focused on characteristics that
influence preventative work for investors and companies. Investors and businesses.
performance of initial public offerings (IPOs) in the under and over price range . Because of
the time and price, I'd like to make a recommendation to investors and businesses for
economic progress. Every beginning will experience performance issues, so this aspect will
have a significant impact on the analysis. significance for newcomers Investors can then sell
such shares on the secondary market trading, Those shares can then be sold on the secondary
market by investors. More than 466 companies in the short-run were studied using raw return
on listing day and varied timeframes of 1 year, 2 years, 3 years, 4 years, and 5 years. Several
factors influenced regression analysis. The performance of book publishing in comparison to
fixed-price publishing The field of initial public offerings (IPOs) is well-studied. Both
approaches of providing result in underpricing. Underpricing of initial public offerings
(IPOs), as described in the literature, is one of the oddities seen in primary markets around
the world.

The term refers to the good initial returns on new issues from offer to listing dates. Although
the data on IPOs' long-run underperformance is diverse, the initial underpricing, or positive
first-day returns, is the most conspicuous and extensively disseminated empirical regularity.
Asymmetric information appears to be the primary cause of IPO underpricing (Rock, 1986;
Ritter and Welch, 2002). Other possibilities include conflicts of interest and agency issues
(Ljungqvist and Wilhelm, 2003; Loughran and Ritter, 2004). 2003) and the significance of
signalling (Allen and Faulhaber, 1989).

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Many of these answers, routed as they are in theory, are likely to be true for emerging
economies as well; there could be institutional elements that impact both the causes and the
effects.

In these countries, there is a significant amount of underpricing. As a result, it would be

intriguing to investigate a new phenomenon. India, for example, has seen a big number of
companies go public in order to fund their expansion. when there is a paradoxical
underpricing. Furthermore, evidence from other countries suggests that book-building issues
are less likely to be underpriced than fixed-price issues. Since 1999, the book-building
process has gained appeal in Indian IPO markets, particularly for comparatively larger IPOs.
Traditionally, Indian IPOs were fixed-price offerings, in which the prices of the equities on
offer were set before investors' bids were solicited. Second, the study of Indian IPOs should
be of interest to the global financial community, as India has become a popular destination
for FIIs over the last several years. Finally, over the last few years, the Indian primary
markets have exploded. The number of new issues coming to market, as well as the total
amount raised, has risen by leaps and bounds. Since its inception in 1999, empirical findings
show that book building has rapidly acquired favour as an issue channel in India.

In 2005, for example, book built IPOs accounted for more than 72% of all IPOs. This pattern
lasted until the later years of the century. Using a sample of 235 IPOs that were freshly listed
on the Indian exchange between 1 April 1997 and 31 March 2008, this study seeks to provide
new information on the first-day IPO market performance.

It also adds to the body of knowledge on underpricing by contrasting underpricing under the
two pricing models. The study looks into how a change in the technique for determining price
affects consumers has an impact on the level of underpricing.

India's Public Issues Process

This section summarises the existing regulations and processes governing India's new issue
process. Prior to May 1992, India's government had complete control over stock issue
pricing. The issue of equity capital was priced using a pre-determined formula by a
government-appointed official known as the Controller of Capital Issues (CCI). Price controls
have been eliminated by the government since then. Companies are free to price equity issues
after May 1992. The fresh issue process is currently regulated by the Securities Exchange

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Board of India (SEBI)9. All companies proposing public stock offerings must submit an offer
document to SEBI for approval. Companies must also announce the price at which the public
offering will be conducted. Such public concerns are managed by an investment banker who
is also the lead manager10. He may be able to enlist the help of other investment bankers. He
is in charge of all major decisions as well as the administration of the issuance process, and
he must follow SEBI's disclosure guidelines. Companies/lead managers have been able to
specify a price band within which the ultimate offer price must fall since 1995, thanks to
SEBI. The maximum price should not exceed 120 percent of the lowest price.

SEBI is also concerned about providing enough information to potential investors and
ensuring that corporations and their merchant bankers do not engage in discriminatory
practises that hurt investors' interests. When allocating funds, investment bankers are unable
to differentiate between different types of investors.

Factors which are independent –

1. Lead time- When it comes to lead time, it is critical that the organisation is extremely
well-prepared. As a result, this guide is current. It walks you through the IPO process
in a simple and comprehensive manner, including important concerns such
2. Issue size- The issue size of a security is the total value of the security issued,
expressed in nominal rather than market value terms. When the amount outstanding
differs from the size of the original offer, it can lead to IPO difficulties.
3. Issue Price- The price at which a corporation sells its shares is known as the issue
price of an IPO. After that, the IPO is listed on a stock exchange. The opening price of
the stock on the day it is listed is the listing price. The discrepancy between the issue
and listing price is largely due to supply and demand for the shares.
4. Lot size – Lot size is the minimum number of shares that an investor needs to bid for.
It is fixed by the company.

Literature review

1. "Factors affecting investment bank initial public offering market share," Craig G. D.
(2000). Between 1984 and 1995, the researcher investigates the influence of many
factors on the market share of investment banks that function as book managers in
initial public offerings. The study found that IPO first-day returns, one-year abnormal

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 performance, abnormal compensation, industry specialisation, analyst reputation, and
association with a withdrawn offer all have a significant impact on market share
changes for established banks. In low-volume IPO markets, these factors have a
greater impact on market share shifts. These characteristics have a less statistical and
economic impact on market share for smaller banks, which is consistent with the idea
that less reputation is at risk.
2. C. Vichakorn, D. G. Kennedy, C. Vichakorn, C. Vichakorn, C. Vichakorn, C. Vic
"Factors Affecting Initial Public Offering Returns in Thailand's Stock Market." The
researchers' major goal was to use multiple regression models to investigate the
association between parameters and the initial return on an IPO. The study used
secondary data, with the first return of an IPO as a dependent variable and the other
nine variables as independent variables. The researchers found that IPO returns in the
Thai stock market ranged from 14 percent to 24 percent over a specific time period.
This figure applies to both domestic and international stock markets. In addition, the
elements that influence the first return of IPOs are revealed. The researchers explore
those data that have relationships to the return of IPOs utilising publicly available data
that can be obtained by ordinary investors.
3. "Study of Factors Affecting the Initial Public Offering (IPO) Price of Shares on the
Tehran Stock Exchange," Leila B. and Farshid A. (2014). The researcher's major goal
was to see if the price of an initial offering on the Tehran Stock Exchange was lower
than it should be, and to look into the elements that influence the price of an initial
share on the stock exchange. Between 2006 and 2012, the researcher included 115
stock exchange companies in the study. The researcher came to the conclusion that
the P/E variable has a considerable relationship with price variations in first offerings
and has the greatest impact on their price.
4. ( R.Selvamathi1 and Dr. A.A.Ananth) This study analyzed empirically evaluate the
IPOs factors determining the under-pricing of IPO factors performance of long run,
observed the effects of factor impact of IPO performance through secondary data of
IPOs and the data was collected from NSE. In that the factor impact of IPOs are
evaluated Lead time, Issue size, Issue price and listing gains , in influencing the IPO
performance by buy and hold raw return on listing day and various timeframes in the
long run use regression analysis as well as their influence on under pricing using
logistic regression analysis of IPOs was observed that the values of independent
variables in the logistic regression
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5. HERAWATI, Aty The difference between purchased price of shares in the primary
market is lower than the selling price of the relevant shares in the secondary market.
Underpricing phenomenon that gives positive initial return is a benefit for investors
because investors can enjoy the return of the stock purchase. This study aimed to
determine the effect of financial and non-financial factors to the initial return on the
IPO companies in the Indonesia Stock Exchange. The research method is causal
research to determining the effect of financial factors and non-financial factors on
initial return. Financial factors are the ratio of profitability (Return on Equity),
liquidity ratio (Current Ratio), the leverage ratio (Debt to Equity Ratio), the ratio of
activity (Total Asset Turn Over), and the ratio of capital markets (Earning Per Share),
whereas non-financial factors are underwriter reputation, auditor reputation, firm age
and firm size. Samples were selected of 23 companies with a purposive sampling
technique, namely companies in the property industry. The data gathered the financial
statement on the IPO property company prospectus in the period of 2007 to 2012.The
method of analysis used in this study is linear multiple regression analysis method.
The results showed that the financial factors such as, the ratio of profitability (Return
on Equity), liquidity ratio (Current Ratio), the leverage ratio (Debt to Equity Ratio),
the ratio of activity (Total Asset Turn Over), and the ratio of capital markets (Earning
Per Share) effect the initial return, while the non-financial factors such as underwriter
reputation, auditor reputation, firm age and firm size do not effect the initial return. It
shows that financial fundamental analysis are very important in assessing the
company's stock price.
6. ANISH BUCHE Stock Market is considered to be back bone of the financial system
of an economy. The phases of growth and decline in an economy are first evident on
the stock market. Stock market is basically a platform for trading of securities of
companies listed in the market and also a platform to raise money from the market by
an Initial Public Offer (IPO). IPO helps a company’s share to get listed on the stock
market and once the shares are listed on the market, they can be traded on the market.
The platform form on which the stock / shares / are traded is termed as stock
exchanges. The two most dominant stock exchanges in India are Bombay Stock
Exchange and National Stock Exchange. There are lots of factors which have direct as
well as indirect impact on the economic growth of India. The factors mostly include
the macroeconomic indicators like GDP, Inflation, Government Spending on the
country, FII, FDI, currency, IIP etc. The prime objective of this paper is to put light
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 on the important factors which have significant impact on the volatility of Indian
Stock Market
7. (Priyanka Singh, Brajesh Kumar) This article investigates the short run as well as long
run underpricing of the Initial Public Offerings in the Indian Capital markets by
looking at the different factors affecting them. As the underwriters do not have
discretionary power in Indian IPOs, some of the theoretical models like Rock’s (1986)
and costly information acquisition hypothesis (1989), which involves the extent of
informed as well as uninformed investors, can be tested more robustly in Indian
Capital markets. Therefore, a model is proposed taking these oversubscription
variables along with age and issue size to explain the underpricing. Since different
sectors have different level of private and public information, it is interesting to
perform industry-wise analysis and has been taken up here. The period for study was
22 months (January 2006 to October 2007) considering 116 IPOs. It was found that
both short and long run return of IPOs are positive for this period. The short run
underpricing was 18 percent and long run underpricing was 11.5 percent.
Oversubscription variables, namely, total oversubscription, informed (institutional
investors) and uninformed investors (retail investors) oversubscription, were found to
be the main determinants of underpricing in the Indian IPOs. Higher subscription
implied higher underpricing. However, informed investor’s oversubscription was
higher in companies giving more return in the long run. Further Indian Capital
markets were found to follow industry specific waves. Upon doing sector-wise
underpricing analysis, the high performing sectors were more underpriced in the short
run as well as performing better in the long run than low performing sectors.
Infrastructure, financial and entertainment sectors with positive long run return fell
under this category for the period of study. On the contrary, IT sector gave higher
initial return but negative return in the long run.
8. (Re-Jin Guo, Baruch Lev, Charles Shi) Financial scholars who research the initial
underpricing and long-term underperformance of IPOs generally attribute these
phenomena to information asymmetry and investors’ misevaluations. Here, we
identify, on a sample of 2,696 US IPOs issued during 1980–1995, a widespread
source of information asymmetry and valuation uncertainty—the R&D activities of
issuers—and document that these activities significantly affect both the initial
underpricing of IPOs (R&D is positively correlated with underpricing) and their long-
term performance (R&D is positively related to long-term performance). Given the
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 pervasiveness and constant growth of firms’ R&D activities in modern economies,
our identification of R&D as a major factor affecting IPO's performance contributes
to the understanding of this important economic and capital market phenomenon.
9. Volodymyr Babich,) Many owners of growing privately held firms make operational
and financial decisions in an effort to maximize the expected present value of the
proceeds from an initial public offering (IPO). We ask: “What is the right time to
make an IPO?” and “How should operational and financial decisions be coordinated
to increase the likelihood of a successful IPO?” Financial and operational decisions in
this problem are linked because adequate financial capital is crucial for operational
decisions to be feasible and operational decisions affect the firm's access to financial
resources. The IPO event is treated as a stopping time in an infinite-horizon
discounted Markov decision process. Unlike traditional stopping-time models, at
every stage the model includes other decisions such as production, sales, and loan
size. The results include (1) characterization of an optimal capacity-expansion policy,
(2) sufficient conditions for a monotone threshold rule to yield an optimal IPO
decision, and (3) algorithmic implications of results in (1) and (2).
10. (MICHELLE LOWRY, MICAH S. OFFICER, G. WILLIAM SCHWERT) The
monthly volatility of IPO initial returns is substantial, fluctuates dramatically over
time, and is considerably larger during “hot” IPO markets. Consistent with IPO
theory, the volatility of initial returns is higher for firms that are more difficult to
value because of higher information asymmetry. Our findings highlight underwriters’
difficulty in valuing companies characterized by high uncertainty, and raise serious
questions about the efficacy of the traditional firm-commitment IPO process. One
implication of our results is that alternate mechanisms, such as auctions, could be
beneficial for firms that value price discovery over the auxiliary services provided by
underwriters.
11. (Alok Pande) The National Stock Exchange (NSE) is India's first fully demutualized
stock exchange. It is also the largest exchange in India in terms of volumes in both
equity and derivatives segments. The previous studies on Initial Public Offerings
(IPOs) in India have been largely confined to the Bombay Stock Exchange (BSE).
This study looks at the pricing of IPOs in the NSE. In particular, it seeks to
empirically explain the first day under pricing in terms of the demand generated
during the book building of the issue, the listing delay between the closure of the book
building and the first day listing of the issue and the money spent on the marketing of
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 the IPO by the firms. It also seeks to understand any emerging patterns in Indian IPO
market with reference to the previous studies. Moreover it seeks to find the post IPO
returns for one month in the NSE. The results suggest that the demand generated for
an issue during book building and the listing delay positively impact the first day
under pricing whereas the effect of money spent on the marketing of the IPO is
insignificant. We also find that in consonance with extant literature, the post IPO
performance in one month after the listing for the firms under study is negative.
12. (ANISH BUCHE ) Stock Market is considered to be back bone of the financial
system of an economy. The phases of growth and decline in an economy are first
evident on the stock market. Stock market is basically a platform for trading of
securities of companies listed in the market and also a platform to raise money from
the market by an Initial Public Offer (IPO). IPO helps a company’s share to get listed
on the stock market and once the shares are listed on the market, they can be traded on
the market. The platform form on which the stock / shares / are traded is termed as
stock exchanges. The two most dominant stock exchanges in India are Bombay Stock
Exchange and National Stock Exchange. There are lots of factors which have direct as
well as indirect impact on the economic growth of India. The factors mostly include
the macroeconomic indicators like GDP, Inflation, Government Spending on the
country, FII, FDI, currency, IIP etc. The prime objective of this paper is to put light
on the important factors which have significant impact on the volatility of Indian
Stock Market
13. (Werner R. Murhadi 31124 )This study aimed to analyze the factors that influence
underpricing on IPO. Variables used in this research is Underwriter Reputation (RU),
Auditor Reputation (RA), Company Age (AGE), firm size (SIZE), Financial Leverage
(FL), Return on Equity (ROE) and Total Asset Turnover (TATO) , This study uses a
quantitative approach with a model of multiple linear regression analysis. This study
used a sample of companies that conduct an Initial Public Offering (IPO) in the period
2004 to 2014 that are listed in the Indonesia Stock Exchange. The number of
observations used in this study were 204 observations. The results showed that the
companies doing IPOs in the period 2004-2014, the variable underwriter reputation,
auditor reputation, and return on equity significantly negative effect on underpricing,
while variable firm age, firm size, financial leverage, and total asset turnover negative
not significantly to underpricing

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 14. Leila B & Farshid A. (2014) – “Study of Factors Affecting the Initial Public Offering
(IPO) Price of the Shares on the Tehran Stock Exchange.” The main objective of the
researcher was to examine whether pricing the initial offering exchange in Tehran
Stock Exchange is less than actual and to study the factors that affect pricing of initial
share on stock exchange. The researcher for the purpose of the study included 115
stock exchange companies from 2006 to 2012. The researcher concluded that P/E
variable has significant relation with price changes on initial offerings and had highest
impact on price of initial offerings.
15. Madhuri Malhotra, N. Premkumar (2017) - In this study, an attempt has been made to
find whether Indian stock market indicates underperformance of IPOs in the long run.
This study also highlights the factors which might have an influence on the price
reactions around IPOs by firms. IPO performance is represented by four variables
namely, age of the firm, time lag, IPO issue size, and company size. Long run IPO
performance is represented by Buy-and-Hold Adjusted Return (BHAR). This study
employs data from companies listed in National Stock Exchange (NSE), which have
gone public from 2004 to 2008. The results show that Indian Stock Exchange Market
shows IPO underperformance in the long run and there is a positive relationship
between the number of shares offered at the time of IPO and underperformance.
Variables such as firm age, time lag, and company size do not have any significant
impact on the long run underperformance of an IPO issue
✓ Research questions
• How does an issue size of a firm describes the under pricing / overpricing of an
IPO ?
• How does the issue price affect the performance of the initial public offer ?
• How does the IPO under pricing and overpricing is affected by long run period ?
✓ issue size ( independent )
✓ Issue price ( independent )
✓ lead time ( independent )
✓ Lot size ( independent )
✓ Listing gains ( dependent )

In case of long term / long run

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H1 = there is a significant relationship between age of firm , offer size of the firm and price
of the firm over priced / underpriced OR there is a significant relationship between age of
firm , offer size of the firm and listing gains

H0= there is no significant relationship between age of firm , offer size of the firm and price
of the firm over priced / underpriced OR there is no significant relationship between age of
firm , offer size of the firm and listing gains

✓ Data sources –

(secondary data )

NSE , chittorgarh and

https://www.chittorgarh.com/report/ipo-listing-date-check-status-price-bse-nse/25/

https://www.nseindia.com/market-data/all-upcoming-issues-ipo

https://www1.nseindia.com/products/content/equities/ipos/historical_ipo.htm

✓ Research methodology

The success of Indian initial public offerings (IPOs) in the long and short run will be
examined in this study. For IPOs, the research will span the years 20011 to 2021. The
numerous elements that influence IPO under pricing and overpricing will be examined in this
study. The long run period is taken as 1 year,2 years and 3 years.upto 5 years

• Research design

The correlation analysis is carried out by between IPO factors and IPO performance
variables in the short-run with the different time frames listing day, 1 year, 2 year, 3
year , 4 year and 5th year by listing gains . The present study is a designed to be
descriptive and analytical

• Sample design

The sample size for our study is the listed IPOs during the study period i.e. 433 IPOs

• Sampling technique –

The sampling is done in the way of purposive sampling / with the help of regression .

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Research Objectives:

• To study the factors that influence 5 years analysis through IPO

• To study regression analysis of selected IPOs by impact factor

• To study the influence of issue price and issue size on listing gains

Regression and correlation methodology

Y = A + b1 leadtime + b2 issue size + b3 lot size + b4 issue price + E

Y =listing gains ,

A=Intercept (Constant)

B1, B2 , B3 , B4 =Estimated coefficients

E =Error-term

Dependent and independent factors

The specification of logistic regression model is as given below.

In ( p / 1-p ) = B0 + B1 lead time + b2 issue size + b3 issue price + b4 lot size

Where P is the probability of under pricing, which is coded as 1 and 1-P is the probability of
overpricing, which is coded as 0 . B0 Is constant, and B1 , B2 , B3 and B4 are the estimated
coefficients .

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Here we can see that 446 is the number of sample that has been taken for the analysis
whereas the mean rate of the listing gains of the sample collected is said to be 11.74 % and
the rate at which they are deviating is 29.28 % .

The mean regarding the issue price is 170. 5 and the standard deviation is 286.446 where we
can see that the issue price plays a important role in deciding in the listing day gains of the
Ipos .

Whereas on the other hand the issue size and lead time also determine the listing gains
dependency it is very vital that the lead time shows very near to mean and standard deviation
which shows a strong relation in the case .

For the lot size it has been seen with the help of the results that not much dependency has
been found after the data was run and tested

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Correlation

We can see here that the lot size and listing gains are negatively correlated as there is a
negative sign also the correlation is said to be very low for the same

Whereas issue size and issue price are positively correlated showing that the dependency
of listing gains is more on these 2 variables .

Now as we talk about the lead time there we can see that it is also negatively correlated
which basically shows that the lead time is on of the factor for the dependency and
relation but not a strong one .

Model Summary and Annova

• Now the model summary talks about the adjusted R square and R Square and there
changes. Here the adjusted R Square is 0.01 which is less than the R square .

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 • The adjusted R-squared increases when the new term improves the model more than
would be expected by chance.
• It decreases when a predictor improves the model by less than expected. Typically,
the adjusted R-squared is positive, not negative.
• It is always lower than the R-squared. When you add additional independent
variables or predictors to a regression model, the R-squared value rises, tempting the
model's creators to add even more variables.
• This is referred to as over fitting, and it might result in an unjustifiedly high R-
squared score.
• The adjusted R-squared method is used to determine how trustworthy a connection is
and how much it is influenced by independent variables.
• It basically provide information regarding determine how much of the correlation
with the index is due to the addition of independent variables.
Analysis
The correlation analysis of four IPO characteristics and listing gains from IPOs that were
listed between 2016 to 2021 in the long term (1, 2, 3, 4, and 5 years).
Positive listings gain is connected with 'lead time' and 'grade' in all 5 long-run periods,
according to the correlation values provided in the table, however the degree of association
between 'grade' and listings is larger than the degree of association between listing gain and
lead time.

Conclusion
In all three long-run periods, there is a significant positive relationship between listing gains
and IPO variables such as IPO quality and lead time. In the long run, issue size has a
considerable impact on one-year listing gains. It is discovered that listing gains are more
likely to increase with increased lead time and IPO grade in the long term than with increased
lead time, and that the extent of increase in listing gains against increased IPO grade is more
than that of lead time. The probability of a two-year listing gain based on underpricing is
1.82.
Suggestion
Long-term IPO factors The investor must make their own independent judgement about
investing in any issue after carefully reviewing the contents of the prospectus, including the
impact of IPO risk factors, obtained by this buy and hold raw return in the long-run and the
issuer. The IPO return is influenced by the lead period (listing delay). As a result, IPO issuing
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businesses should avoid extending the listing date, and the listing process should be rapid and
efficient. Investors must evaluate the size of the IPO when investing because issue size is a
key determinant of IPO results both in the short and long term. In the presence of issue size,
IPO grading has an impact on IPO results. As a result, while analysing the scale of an issue,
Investors should consider IPO grading, which is based on the fundamentals and prior
experience of the issuing firms. The number of companies going public in India has recently
increased, but we are still far behind other developed markets, therefore IPOs are sometimes
viewed as a speculative opportunity rather than an opportunity to diversify portfolios.
Furthermore, the evolution of the putting method from fixed-price offers to book building has
had little impact on the Indian IPO market's efficiency. It's a shame that following the listing,
intermediaries' activism in India lacks transparency. SEBI should put together as soon as
feasible a list of specific information that intermediaries must file and publicise when trading
shares after the listing.

Annexure
Year 2021
Issuer Company Lot Size Issue Issue lead Listing Day
Price Size (Rs time Gain / Loss (%)
(Rs) Cr)
Fabino Life Sciences 3000 36 3.24 4 9.91
Limited IPO

Timescan Logistics 2000 51 4.81 3 42.46

(India) Limited IPO

Ascensive Educare 4000 26 2.26 4 40.81

Limited IPO

19
AB Cotspin India 4000 35 10.09 4 22.24
Limited IPO

Vivo Collaboration 1600 82 4.4 3 -1.29

Solutions Ltd IPO

CMS Info Systems 69 216 1100 2 -15.76

Limited IPO

Brandbucket Media & 2000 55 8.25 3 29.03

Technology Limited
IPO

Wherrelz IT Solutions 800 171 2.01 5 -19.88

Limited IPO

Clara Industries 3000 43 3.02 5 35

Limited IPO

Supriya Lifescience 54 274 700 4 6.09

Limited IPO

Euro Panel Products 2000 70 45.5 2 60.15

Limited IPO

Foce India Limited 600 225 29.03 4 0.76

IPO

20
HP Adhesives Limited 50 274 125.96 2 81.54
IPO

Data Patterns (India) 25 585 588.22 2 26.89

Limited IPO

Medplus Health 18 796 1398.3 2 148.02

Services Limited IPO

Metro Brands Limited 30 500 1367.51 4 3.06

IPO

C.E. Info systems 14 1033 1039.61 4 270.4

limited IPO

Shriram Properties 125 118 600 2 22.74

Limited IPO

Rategain Travel 35 425 1335.74 2 96.15

Technologies Limited
IPO

Nupur Recyclers 2000 60 34.2 2 -5.93

Limited IPO

Anand Rathi Wealth 27 550 660 4 -5.5

Limited IPO

21
Tega Industries 33 453 619.23 2 185
Limited IPO

Star Health and Allied 16 900 7249.18 1 -1.73

Insurance Company
Ltd IPO

Year 2020
DMR 6000 21 2.09 5 10.04
Hydroengineering &
Infrastructures
Limited IPO

Go Fashion (India) 21 690 1013.61 5 16.63

Limited IPO

Omnipotent 2000 63 18.9 6 53.2

Industries Limited IPO

Tarsons Products 22 662 1023.47 2 -1.13

Limited IPO

Latent View Analytics 76 197 600 2 -1.84

Limited IPO

22
Sapphire Foods India 12 1180 2073.25 2 3.85
Limited IPO

One 97 6 2150 18300 2 -7.29

Communications
Limited IPO

Suyog Gurbaxani 3000 45 29.5 7 37.06

Funicular Ropeways
Limited IPO

S.J.S. Enterprises 27 542 800 2 -11.59

Limited IPO

PB Fintech Limited 15 980 5625 2 10.21

IPO

Sigachi Industries 90 163 125.43 2 -6.79

Limited IPO

Nidan Laboratories 1000 125 50 4 29.62

and Healthcare
Limited IPO

Fino Payments Bank 25 577 1200.29 3 -27.25

Limited IPO

23
FSN E-Commerce 12 1125 5351.92 3 113.32
Ventures Limited IPO

Kotyark Industries Ltd 2000 51 11.26 4 65.59

IPO

D.K. Enterprises 3000 40 7.99 5 3.92

Global Limited IPO

CWD Limited IPO 800 180 18.01 4 76.13

Adishakti Loha and 10000 11 2 4 108.7

Ispat Limited IPO

Bombay Metrics 1200 93 4.29 3 15.93

Supply Chain Limited
IPO

Samor Reality Limited 2000 62 8.06 4 20.72

IPO

Promax Power 10000 10 1.6 3 42.31

Limited IPO

Dynamic Services & 2000 51 24.13 4 24.69

Security Limited IPO

24
Destiny Logistics & 6000 20 5.39 4 2.98
Infra Limited IPO

Shri Venkatesh 3000 40 11.71 1 22.83

Refineries Limited IPO

Jainam Ferro Alloys (I) 2000 70 19.61 1 -4.7

Limited IPO

Aditya Birla Sun Life 20 712 2768.26 2 18.08

AMC Ltd IPO

Getalong Enterprise 2000 69 5.18 3 -9.44

Limited IPO

Quadpro ITeS Limited 6000 20 14.1 2 -13.45

IPO

Paras Defence And 85 175 170.78 2 -5.24

Space Technologies
Limited IPO

SBL Infratech Limited 1200 111 2.37 4 26.62

IPO

25
Markolines Traffic 1600 78 40 5 -3.83
Controls Limited IPO

Sansera Engineering 20 744 1282.98 2 43.22

Limited IPO

Prevest Denpro 1600 84 26.61 2 11.39

Limited IPO

Platinumone Business 1200 92 3.89 5 88.22

Services Limited IPO

BEW Engineering 2000 58 3.97 5 29.55

Limited IPO

Naapbooks Limited 1600 74 3.99 5 66.66

IPO

Vijaya Diagnostic 28 531 1895.04 2 -1.83

Centre Limited IPO

Ami Organics Limited 24 610 569.64 2 15.83

IPO

DU Digital 2000 65 4.49 5 1.81

Technologies Limited
IPO

26
Aptus Value Housing 42 353 2780.05 2 109.31
Finance India Ltd IPO

Chemplast Sanmar 27 541 3850 2 29.29

Limited IPO

Aashka Hospitals 1000 121 101.64 14 -4.42

Limited IPO

Nuvoco Vistas 26 570 5000 1 29.15

Corporation Ltd IPO

Further data is also year wise or next 3 years . hence 2 year dat has been provided for
reference of the study and to show the type of data taken for analysis and running the test.

Refrences

• Banu Durukan(2002)- The relationship between IPO returns and factors

influencing IPO performance: Case of Istanbul Stock Exchange Managerial
Finance 28(2):18-38 · February 2002 2 Dempere, J. M. (2008). SELF-
UNDERWRITTEN IPOS. Journal of Global Business and Technology, 4(1), 1-
18. Rock, K. (1986). Why new issues are underpriced. Journal of Financial
Economics, 15(1-2), 187-212.
• Sanjay Poudyal (2008) "Grading Initial Public Offerings (IPOs) in India's Capital
Markets A Globally Unique Concept" W.P. No.2008-12-08
• Statistical Significance of IPO factors impact by short run Analysis -R.
Selvamathi and Dr. A. A. Ananth International Journal of Advance and Innovative
Research- Volume 6, Issue 1 ( II ): January - March 2019 page 44-48
• www.sibi.org
• www.moneycontrol.com

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• Aggarwal, R. and Rivoli, P. (1990). Fads in the initial public offering market?
Financial Management, 19, 45-57. Allen, F. and Faulhaber, G. R. (1989).
Signalling by underpricing in the IPO market. Journal of Financial Economics, 23,
303- 323. Baral, S. K. and Obaidullah, M. (1998).
• Short-run price behavior of IPOs in India: some empirical findings. In T. P.
Madhusoodanan (ed.), Indian Capital Markets: Theories and Empirical Evidence
(pp. 15-30). India: Quest Publishers. Baron, D. P. (1982).
• A model of the demand for investment banking advising and distribution services
for new issues. Journal of Finance, 37, 955-976.

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