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*#4, To identify the trend and return of IPO from 2006-2010. Organization offer IPO is to
raise capital for their organization. The main reason is because companies plan to use the money
gathered from IPO to further expand their business or to increase their business operations. In
this study we are trying to know that the IPOs trend and returns in the Indian market and how
much it is beneficial for them and getting the depth knowledge of the market as a finance student
and analyzing the data and know the trends changes in the IPOs of the banks.

,4.-56,)/10.75&#&/ ± Secondary data has been collected from the Bombay Stock
Exchange of India, SEBI etc. Correlation is used to study the relationship between return from
IPO and return from sensex. Chi-square is to be used to analysis the return from IPO¶s are
depended or not on time period.

-1-.4 ± Since the significance value based on chi-square at 95% confidence level is 0.85
which is grater then 0.005 «««««.the null hypothesis will be accepted i.e. HO: Return from
IPO is independent of time period. The study simply shows that Return of the IPOs is
independent on the time period which shows times changes the return of the IPO.

,4,&#/06)&)-4560&)-4 ± A limitation of this study is the sample including only we


have used the secondary data.

#&)&0 60&)-4 ± Research results indicate that Time period and Returns plays a
important role in the study

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An -)&0 *30 88,#-. ( ), referred to simply as an "offering" or "flotation", is when a


company (called the issuer) issues common stock or shares to the public for the first time. They
are often issued by smaller, younger companies seeking capital to expand, but can also be done
by large privately-owned companies looking to become publicly traded.

In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it determine
what type of security to issue (common or preferred), best offering price and time to bring it to
market. The first sale of stock by a private company to the public. IPOs are often issued by
smaller, younger companies seeking the capital to expand, but can also be done by large
privately owned companies looking to become publicly traded
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To test whether a stock has been priced at its intrinsic worth or not and to determine the
magnitude and degree of the deviations of market price of the stock from its offer price, returns
have been computed.
Initial Ret. = 9!:;<! --------------------- (i)

Where I_Ret. = subscriber¶s initial return
P1 = closing price on the first day of trading
Po = Offer price

MAER = [!:=! ; * 100------------------ (ii)




Where MAER = Market adjusted excess return


M1 = Closing value of Market Index on the first trading day
Mo = Closing value of Market Index on the offer closing date.

Secondary Sources are )/, (*#-&04> ,4,&#/ &,#4> #)0,4> -),#-,)> 6&.&?-,4> &-1
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Data gathered in the survey were analyzed using SPSS (Statistical Package for Social Sciences,
Version 17.0).

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The correlation between return from IPO and SENSEX return is j jj?

The value of correlation is in between (+1 to -1) the value of correlation shows that there is
significant difference between return from IPO and sensex and there is correlation between
returns from IPO and sensex.

If the value is near of +1 then there is positive relationship and if the value is near of -1 then
there is negative relationship.
Since the significance value based on chi-square at 95% confidence level is 0.85 which is grater
then 0.005 «««««.the null hypothesis will be accepted i.e. HO: Return from IPO is
independent of time period.

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? Since returns are independent on time period, therefore there is no need of investors to invest
according to time.
? Also returns from IPO and Sensex are slightly positive correlated with each other i.e. when
there is increase in Sensex we get lower returns from IPO. Therefore investor should avoid
investing in IPO when there is increase in Sensex.
? Since return from different years differ significantly from each other, therefore investor
should diversify its portfolio in order to reduce risk or to maximize returns from IPO.
?

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„rom the foregoing analysis, it can be concluded that IPO Performance is present in BSE. It can
also be concluded that under IPO is more severe in the short run periods, i.e., from the listing day
to the six months after the listing.. It shows that if an investor buys and holds the equities, how
much he is going to earn over the considered time period. In addition to that an analysis of the
influence of factors on IPOs pricing performance has been done. The factors taken in to
consideration are: Initial Return, Average return, Sensex return and Time period. The results
show that these factors influence the initial returns, i.e., I_Ret. of the listing day of the company.