خلاصة:
Paper studies the impact of the liquidity, underpricing and ownership up on both the short term and long termperformance of the Initial Public Offer (IPO) stocks in the equity markets of India. Empirical analysis is undertaken to study the impact of liquidity, underpricing and ownership on Performance of IPO stocks. Multiple regression analysis is undertaken for analyzing the impact. It is found that the short term and long term performance of underpriced IPO stocks is highly dependent on the amount of underpricing at IPO time, Whereas the overpriced IPO stocks depends on the long term liquidity characteristics for the long term performance. However the market adjusted returns are influenced by the liquidity in the long term and non-significantly by the underpricing. Holistic model built in the study explains 80 percent variance of first week returns, 30 percent variance of first year returns and 20 percent variance in the 3 years returns. Inclusion of Ownership structure and liquidity variables in the model provides better explain ability of the IPO stocks performance in the long term
ملخص الجهاز:
, 4 (3), 171-184, Summer 2014 © IAU Underpricing, Ownership and Liquidity of Initial Public Offers (IPO) and Their Impact on Performance of IPO Stocks in Equity Markets of India *1 V.
Kumar Gupta 1 Indian Institute of Management Raipur (IIM Raipur), Raipur, India 2 Indian Institute of Management Indore (IIM Indore), Indore, India Received 23 May 2013, Accepted 4 February 2014 ABSTRACT: Paper studies the impact of the liquidity, underpricing and ownership up on both the short term and long termperformance of the Initial Public Offer (IPO) stocks in the equity markets of India.
Pritsker (2006) emphasizes the importance of studies for underpricing and its impact on the long term performance of IPO stocks in secondary markets.
Holistic studies of dependence post market performance of IPO stocks on underpricing, ownership structure and liquidity are found to be absent in the literature.
At the same time, subscription rate, price to book value and promoter’s retention had no significant impact on the performance of the IPOs. Pande and Vaidyanathan (2007) find that greater the delay in the listing, results in greater demand and hence higher returns are generated on the initial day trading.
In the initial stage, multiple regression analysis was done to analyze the relation between the IPO stock short term performance and underpricing, liquidity and ownership structure.
Multiple regression analysis was done to analyze the relation between the IPO stock long term performance and underpricing, liquidity and ownership structure.