INITIAL PUBLIC OFFERING AND LISTING:

AN EMPIRICAL STUDY

PROJECT REPORT

Submitted by:
M. MOHAMED SHAQEEF
RRN: 200292601102

In partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of

Dr. J. HEMALATHA (Senior grade)

Assistant Professor

DEPARTMENT OF MANAGEMENT STUDIES

August 2022
 BONAFIDE CERTIFICATE

Certified that this Research project report is INITIAL PUBLIC OFFERING AND
LISTING: AN EMPIRICAL STUDY is the Bonafide work of M. MOHAMED
SHAQEEF (RRN:200292601102) who carried out the project work under my
supervision. Certified further, that to the best of m knowledge the work reported herein
does not form part of any other project report or dissertation on the basis of which a
degree or award was conferred on an earlier occasion on this or any other candidate.

SIGNATURE SIGNATURE
Dr. J. HEMALATHA (senior grade) Dr. M. SHANMUGAM
SUPERVISOR HEAD OF THE DEPARTMENT
Department of Management studies Department of Management studies
B.S.A Crescent Institute of science B.S.A Crescent Institute of science
and Technology and Technology
Vandalur, Chennai – 600048. Vandalur, Chennai – 600048.
 VIVA-VOCE EXAMINATION

The viva-voce examination of the project work titled “INITIAL PUBLIC

OFFERING AND LISTING: AN EMPIRICAL STUDY” submitted by “M.

MOHAMED SHAQEEF” (RRN: 200292601102) is held on July 2022.

INTERNAL EXAMINER EXTERNAL EXAMINER

ACKNOWLEDGEMENT

Undertaking this MBA has been a truly life-changing experience for me and it would
not be having been possible to do without the support and guidance that I received
from many people.

First and the foremost wishes, I would like to thank the ALMIGHTY for the blessings
to complete this project successfully.

I owe my sincere thanks to our beloved Dean, Dr.K. Srinivasan B.S. Abdur Rahman
Crescent Institute of Science and Technology, Chennai for his advice to carry out this
project.

I gratefully acknowledge the support I received from my Head of the Department,

Dr.M. Shanmugam, B.S. Abdur Rahman Crescent Institute of Science and
Technology, Chennai.

I express my deep sense of gratitude to my guide Dr. J. Hemalatha, Assistant

Professor, B.S. Abdur Rahman Crescent Institute of Science and Technology,
Chennai for her valuable guidance and who has always been the source for
visualization and presentation for this project.

I owe my sincere thanks to Management, faculty members as well as supporting

staff of B.S. Abdur Rahman Crescent Institute of Science and Technology, Chennai
for their constant encouragement and guidance through-out the project.

I would like to express my deepest sense of gratitude to my family members and my

friends, who remain constant source of encouragement and inspiration throughout my
life and academic career.
ABSTRACT

The project titled "Initial Public Offering and Listing: An empirical study" identifies
the best method of an abnormal performance direction. The main objective of the study
is to compare the issue price and list price of stock during the past five years. The aim
of the study is to know the role of the intermediaries of an IPO and it is limited only
to the National Stock Exchange (NSE) IPO 's. The study reveals the significant
relationship between the initial listing performance of IPO which varies from the offer
price and the issue price. The analysis indicates that the offer price has a positive
relationship towards IPO's and negative relationship on issue price and market price.
The data which have been used for the study is a secondary data which is used by
others and it is not a direct information. The charts are used for data analysis and
interpretation. From this analysis some general findings are related with the objective
of the study.

KEYWORDS
Initial public offering, under pricing, corporate governance, NSE, issue price,
board of directors.
 LIST OF CONTENTS

CHAPTER TITLE PAGE NO.

1 INTRODUCTION

1.1 Introduction

1.2 Review of literature

1.3 Objective of the study

1.4 Scope of the study

2 METHODOLOGY

2.1 Research project design

2.2 Data collection

2.3 Sampling & population

2.4 Tools used for analysis

3 DATA ANALYSIS AND INTERPRETATION

3.1 Column chart

4 SUMMARY AND SUGGESTIONS

4.1 Summary of findings

4.2 Limitations of the study

4.3 Conclusion

Bibliography
 LIST OF TABLES

TABLE NO. TITLE OF THE TABLE PAGE NO.

3.1 Issue size – year wise

3.2 Issue size – industry wise

3.3 Issue size in chemical companies

3.4 Issue size in finance companies

3.5 Issue size in FMCG companies

3.6 Issue size in health care

companies
3.7 Issue size in infrastructure
companies
3.8 Issue size in software and IT
services companies
3.9 Issue size in miscellaneous
companies
3.10 Issue size in 2021 of all
companies
3.11 Issue size in 2020 of all
companies
3.12 Issue size in 2019 of all
companies
3.13 Issue size in 2018 of all
companies
 LIST OF CHARTS

TABLE NO. TITLE OF THE CHART PAGE NO.

3.1 Issue size – year wise

3.2 Issue size – industry wise

3.3 Issue size in chemical companies

3.4 Issue size in finance companies

3.5 Issue size in FMCG companies

3.6 Issue size in healthcare

companies
3.7 Issue size in infrastructure
companies
3.8 Issue size in software and IT
services companies
3.9 Issue size in miscellaneous
companies
3.10 Issue size in 2021 of all
companies
3.11 Issue size in 2020 of all
companies
3.12 Issue size in 2019 of all
companies
3.13 Issue size in 2018 of all
companies
 CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION

What is IPO?

• • A business can ask for money from the general public through an initial public
offering (IPO). Given that IPOs usually involve a share premium, they may provide
current private investors with a strong opportunity to fully realise their investment
returns. In the meanwhile, public investors may continue to participate in the
offering.
• A corporation is considered to be private before turning public. The business has
developed with a small group of shareholders, including early backers like the
founders, their family, and friends, as well as seasoned backers like venture
capitalists and angel investors. The firm is now a pre-IPO private corporation. A
corporation can obtain substantial capital through an initial public offering (IPO),
which is a significant milestone. This boosts the company's potential for
development and growth. The enhanced transparency and legitimacy of its stock
listing may also help it acquire better terms when seeking borrowed capital.
• A company will start marketing its interest in going public whenever it feels ready
to handle the demands of SEC legislation. When a firm has attained a private
valuation of $1 billion or more, it typically enters this stage of development.
Private enterprises may be eligible for an IPO, albeit it depends on the level of
market competition and their ability to fulfil listing requirements.
• The price of IPO shares is determined by underwriting due diligence. A company's
private share ownership changes to public ownership when it goes public. Existing
private shareholders' shares are now worth the going market rate.
• Additionally, special underwriting procedures for private to public share
ownership may be incorporated. Millions of investors have the option to buy
company shares on the open market and add money to the shareholders' ownership.
The term "public" refers to any individual or institutional investor who want to

1
 make an investment in the firm. The parameters that define the equity worth of the
company's new owners often depend on the quantity of shares sold and the price
at which they are sold. Investors' shares continue to be referred to as shareholders'
equity in both private and public companies, although with an IPO, shareholders'
equity increases significantly because of the money obtained from the main issue.

Why does a Company go Public?

➢ To expand operations, develop new goods, or settle debts, every business

requires money. An excellent approach for a business to obtain this critical
financing is to go public. letting owners and early investors sell their shares in
order to profit. For original investors and venture capitalists, it is also viewed as
an exit plan. By selling its shares in an IPO, a firm can become liquid. In order
to profit and leave the firm, venture capitalists sell their equity at this point
Greater public awareness
➢ The calendar for the stock market has "stars" next to IPOs. These events are
getting a lot of attention and buzz. This is an excellent technique for a business
to advertise its goods and services to a fresh group of consumers.

How is an IPO issued?

A corporation first issues its shares to public shareholders during an initial public
offering (IPO). In the prior article, we learned why a private firm decides to go
public and how investors stand to gain from doing so.

Merchant Banker

A merchant banker is chosen by the firm is issuing the IPO. A merchant banker's
duties can be divided into two categories:

• Pre-Issue - The merchant banker's Pre-Issue duties include adhering to SEBI

and other authorities' regulations and concluding the steps necessary to list
shares on the Stock Exchange.

2
• Post Issue - The post issue function includes processing escrow accounts, ensuring
that unsuccessful applicants receive a full refund, providing share allotments, and
ensuring that agencies are abiding by the rules established by SEBI for the IPO
process. Book Running Lead Managers are another name for merchant bankers. J.P.
Morgan, Goldman Sachs, and Citigroup are a few of the top merchant banks in the
globe.

Bankers to the Issue

Professionals who are in charge of problems like this are called bankers.

• Recurring dividends

• Funds transfer

• Refunds for rejected applications.

Their contribution is crucial in transferring money and determining the foundation for
allocations.

Registrars to the Issue

The IPO allotment's foundation shall be determined by the Registrars. They eliminate
the inappropriate applications from the final list of legitimate and acceptable
applicants.

They also attest to the receipt of refunds by unsuccessful applicants and the crediting
of the allotted shares to the demat accounts of successful applicants.

The Lead Manager works in concert with them to make sure that all essential
deadlines, such as those for transferring applications from collecting centres to
processing centres, are met. The Registrar and Lead Manager ensure sure the entire
procedure is carried out. Underwriters

3
Underwriters are intermediaries who have promised to buy any unsold shares of the
company's issued stock. Together, they decide the price for the securities, purchase
them from the issuer, and trade them in accordance with their agreement. They also
work closely with the business that issues the securities.

The underwriters get underwriting fees from the issuers, and the issuers can make
money by selling the underwritten shares. They also incur the risk of suffering
financial loss if they are unable to sell every share at the predetermined price .

Life-cycle of an IPO

Let’s take a glance at the life-cycle of an IPO:

1. The issuing business engages the following to begin the IPO process:

• Lead supervisor
• Registered Issuer
• Syndicate individuals

2. A draught offer prospectus for the IPO is created by the lead manager and submitted
to SEBI prior to the offering. Additionally, it controls the issue's campaigns.

3. SEBI assesses the draught offer prospectus and sends it back to the lead manager
for any necessary adjustments. The draught prospectus changes into the offer
prospectus when it is approved.

4. Next, the lead manager: • Submits the Offer Prospectus to the Registrar of Issue and
the stock exchanges to make it official.

• Chooses, together with the issuing company, the issue date and price range.

• Increase the prospectus's date and pricing range. The Red Herring Prospectus is now
this prospectus' official name.

• Creates and transmits the Red Herring Prospectus and IPO Application Forms to
syndicate members for distribution to investors.

4
5. The IPO starts, and investors are prompted to submit their offers.

6. The members of the syndicate gather investor bids and submit the information to
the stock exchanges.

7. After the public issue has concluded, the lead manager evaluates the issue price
based on the bids received. The lead manager also updates the Red Herring Prospectus
with the final price and sends it to SEBI and stock markets.

8. The registrar of issue: • Collects the monies and applications from the syndicate
members.

• Examines the application forms' authenticity and completeness.

• Finalizes the share allotment plan in accordance with the valid bids

• Creates the basis for allocation

• Distributes the shares to investors' Demat accounts and ensures that those applicants
who were turned down receive refunds.

9. The lead manager uses the stock exchange to determine the issue listing date after
the registrar completes the process.

10. Eventually, the stock is listed.

PROCEDURE FOR AN INITIAL PUBLIC OFFERING

Different laws apply to IPO proceedings in various nations. Under the Securities Act
of 1933, the United States Securities and Exchange Commission oversees the
regulation of initial public offerings (IPOs) in this country. Prospectuses are reviewed
and approved by the UK Listing Authority, which also oversees the listing procedure.

Planning

5
A successful IPO depends on planning. Seven planning steps are suggested in one
book:

1. Create an impressive management and skilled team

2. Expand the company's operations with an eye toward the public market

3. Obtain audited financial statements utilising accounting rules recognised by the IPO.

4. Clear the company's record

5. build up your antitakeover defences

6. Improve corporate governance

7. develop insider bailout opportunities and utilise IPO windows.

Retention of underwriters

Investment banks commonly participate in IPOs as one or more "underwriters." The

company issuing the shares, known as the "issuer," enters into a contract with a lead
underwriter to sell its shares to the general public. The underwriter will then make
offers to investors to sell those shares.

The "primary underwriter" for a significant initial public offering is often a "syndicate"
of investment banks (IPO). Following the sale of the shares, the underwriters retain a
portion of the proceeds as their fee. This expense is referred to as the "underwriting
spread." A drop from the price of the sold shares is used to calculate the spread (called
the gross spread The manager's fee, the underwriting fee paid by members of the
syndicate, and the concession, which represents the profit made by the broker-dealer
selling the shares, are the common components of an initial public offerings (IPO)
underwriting spread that are computed per share. The entire underwriting spread would
go to the Manager. The underwriting fee and the concession must be paid by a
syndicate member. The syndicate member who gave the broker-dealer the shares
would keep the underwriting fee rather than the broker-dealer who merely obtains the
concession but does not sell any shares. The managing/lead underwriter, also known
as the bookrunner, generally sells the greatest amounts of the IPO and typically
receives the highest portion of the gross spread, up to 8% in some circumstances.

6
Numerous syndicates may be involved in multinational IPOs in order to satisfy the
various legal requirements in both the issuer's home market and other locations. In
addition to the principal selling syndicate that represents it in its home market,
Europe, an issuer with a base in the European Union might also have separate group
corporations or selling entities for the US/Canada and Asia. Typically, the head
selling group's lead underwriter is also the lead bank in the other selling groups.

Due to the lengthy list of legal requirements and the high cost of the process, initial
public offerings (IPOs) also frequently involve one or more law firms with a
substantial practise in securities law, such as the Magic Circle corporations of London
and the white-shoe firms of New York.

Richard Sylla and Robert E. Wright, financial historians, have demonstrated that, prior
to 1860, the great majority of early American corporations sold shares of themselves
directly to the general public without the use of middlemen like investment banks. A
direct public offering (DPO), in their terms, was done at a share price decided by the
issuing business rather than through the use of an auction. It is akin to fixed price
public offerings in this way, which predominated as the standard for IPOs in the
majority of non-US nations in the early 1990s. Regarding offers handled by investment
banks, the DPO addressed the agency issue.

Pricing and allocation

There are numerous allocation and pricing options for shares during an IPO. Popular
methods consist of:

widespread techniques Best efforts contracts, strong commitment contracts, and all-
or-nothing approaches are examples of common tactics.

The underwriters allow institutional and individual clients to buy public offerings.
When he sells shares of an IPO to his clients, a licenced securities salesperson (known
as a Registered Representative in the US and Canada) gets paid. A percentage of the
selling concession, or fee, that the issuer pays the underwriter makes up this payment.
It is likely that the client's and adviser's financial goals are not always in line when the
salesman is also the client's financial advisor and the IPO is not a "hot" issue

7
(undersubscribed). Eliot Spitzer took legal action before that, Some big investment
firms began to provide favourable research coverage of businesses in a bid to assist
corporate finance departments and retail divisions engaged in the marketing of new
issues, which eventually became known as the Global Settlement enforcement
agreement. The main disagreement covered by that enforcement agreement had
already been resolved in court. Ten of the biggest American investment companies
discussed a potential conflict of interest between their analytical and investment
banking divisions. All of the investment companies involved in the settlement
participated in behaviours that made it possible for their investment bankers, who were
after lucrative fees, to improperly influence their research analysts.

Clients in the US are issued a red herring prospectus, which is an introductory

prospectus, during the initial quiet period. The prospectus was known as a "red
herring" because of the warning statement that was printed in big red on the front
cover. The notice states that the offering information is unfinished and subject to
modification. Despite possible variations in language, the most of them tend to follow
the Facebook IPO red herring model. Throughout the quiet time, the shares aren't for
sale. Brokers can nonetheless spot indications of client interest. At the time of the stock
launch, when the Registration Statement has become effective, indications of interest
may be converted into buy orders.

The registration statement on Form S-1 must be printed (and, in the contemporary day,
also electronically filed with the SEC) as the final step in drafting and submitting the
final IPO prospectus, and the issuer must work with one of the major financial
"printers" to do this. Before the financial printer submits the final prospectus with the
Securities and Exchange Commission, the issuer, issuer's counsel (attorneys),
underwriter's counsel (attorneys), the lead underwriter(s), and the issuer's
accountants/auditors often make final revisions and proofread the document.

Pricing

A lead manager, often referred to as a bookrunner, is frequently hired by businesses

preparing for an initial public offering (IPO) to assist in determining the right price at
which the shares should be issued. In essence, there are only two methods for
calculating an IPO's price. With the "fixed price technique," the business and its top
management jointly decide on a price. Alternatively, the bookrunner may analyse data
on private investor demand to set the price ("book building").
8
Exorbitant prices were charged in a lot of previous IPOs. An IPO that is underpriced
has the effect of increasing interest in the stock when it first starts trading publicly.
Investors who bought IPO shares at the offering price may realise big returns if they
flip, or swiftly sell shares for a profit. Underpricing an IPO, on the other hand, loses
the issuer lost opportunity costs. One extreme example of this is the IPO of The Globe
Com, which led to the IPO "mania" of the late 1990s internet age. Bear Stearns
underwrote the initial public offering (IPO), which had a price of $9 per share on
November 13, 1998. The stock's price swiftly rose by 1,000% to a high of $97 on the
first trading day.

The stock finally fell once again as a result of institutional flipping's selling pressure,
ending the day at $63. The level of demand for the offering and the volume of trading
that occurred are said to have cost the firm up to $200 million, despite the fact that the
corporation did make roughly $30 million from the sale.

A significant additional consideration is the potential for overcharging. The

underwriters may find it difficult to fulfil their obligation to sell shares if a stock is
sold to the public at a price higher than the market would sustain. On opening day, the
stock price can decline even if they sell every share that was issued. The likelihood
that the stock won't be able to be sold in that situation would further reduce its value.
Investor losses may follow, even though many of them are the underwriters' most
valued clients. Undoubtedly the most well-known instance of this is Facebook's IPO
in 2012.

Because of this, while determining the pricing for an IPO, underwriters take a wide
variety of criteria into account and work to determine an offering price that is both
high enough to give the firm enough funding and cheap enough to generate interest in
the shares. Underwriters use a range of non-GAAP measures and key performance
indicators when calculating the price of an IPO. The underwriters ("syndicate") usually
get share purchase agreements from top institutional investors as part of the process of
determining the right price.

The underpricing of initial public offerings (IPOs), according to some researchers

(Friesen & Swift, 2009), frequently results from investors overreacting rather than
from a conscious choice on the part of issuers and/or underwriters (Friesen & Swift,

9
2009). An option for deciding whether to underprice is to use algorithms for IPO
underpricing.

Shares of an IPO can be distributed entirely based on price aggressiveness since in a

Dutch auction, every successful bidder pays the same price per share. A Dutch auction
is one that is based on a technique developed by economist William Vickey and is
known as Open IPO. Through the use of an auction, all shares can be sold from the
highest to the lowest bids at the same price.

Treasury notes were initially offered for sale in a discriminating or pay-what-you-bid

auction, in which the various successful bidders did not all agree on the same price but
rather each paid the yield they requested. Many other nations have employed
discriminatory auctions for initial public offerings as well as uniform price or "Dutch"
auctions, but the US has solely used uniform price auctions up until now. Important
initial public offerings (IPO) auctions have been place for Google, BAA Plc, Singapore
Telecom, Japan Tobacco, and (ordered by size of proceeds).

Several American businesses, including Morningstar, Interactive Brokers Group,

Overstock.com, Ravenswood Winery, Clean Energy Fuels, and Boston Beer
Company, went public using a variant of the Dutch auction. In 2004, Google adopted
the Dutch auction procedure for their IPO. The notion of conducting public securities
offerings using an auction method has drawn criticism from conventional American
investment banks. The auction mechanism, as opposed to traditional IPOs, assures fair
access to the distribution of shares by doing away with the underwriters' preferential
treatment of large clients. Despite hundreds of auction IPOs in other nations, the Dutch
auction process is still rarely employed in U.S. public offerings because of this
resistance.

Taking into account conflicting goals is necessary to determine if a Dutch auction is

successful or unsuccessful. If the aim is to reduce risk, a regular IPO may be more
effective since the underwriter controls the process rather than basically leaving the
choice of who decides to bid or what strategy each bidder chooses to use up to chance.
In the Dutch auction, from the investor's perspective, everyone has equal access. The
underwriter can also actively control bids thanks to specific Dutch auction
modifications, and can even let select bidders know about general auction patterns
during the bidding period.

10
Others have said that a uniform price auction is more efficient at determining prices,
despite the fact that the justification for this assertion is founded on the concept of
discrete private values (that the value of IPO shares to each bidder is entirely
independent of their value to others, even though the shares will shortly be traded on
the aftermarket). The theory that takes into account assumptions more appropriate for
IPOs does not find sealed bid auctions to be a feasible method of price discovery, even
though another sort of modified auction may produce a better outcome.

There is no data from the United States to support the claim that the Dutch auction
performs any better than the conventional IPO in a difficult market environment, in
addition to the overwhelming international evidence showing auctions have not been
effective for IPOs. After multiple failed attempts to price it, White Glove Health, Inc.'s
Dutch auction IPO, which had been announced in May 2011, was postponed until
September of that same year. The fall in stock investments is being attributed, in a
Wall Street Journal report, to "wider stock-market volatility and worry about the global
economy."

Quiet period

Ten days following an IPO's first day of open trading constitute the second "quiet
period." During this time, insiders, as well as any underwriters taking part in the IPO,
are not permitted to provide profit forecasts or research reports for the company.
Following the end of the quiet period, the underwriters frequently begin their research
on the firm. There is a three-day waiting period for any Member who took part as a
manager or co-manager in a secondary offering.

There are two windows of time in an IPO's history that are known as "silent periods"
according to American securities legislation. The first, to which the above-mentioned
link refers, is the window of time after the firm files its registration statement but
before SEC staff declares it effective. Issuers, corporate executives, analysts, and other
parties are prohibited by law from talking about or promoting the planned IPO during
this time (Securities and Exchange Commission of the United States, 2005).

Delivery of shares

11
Certain initial public offerings (IPOs) are ineligible for delivery settlement via the
DTC system; in these circumstances, the stock certificates must be physically
delivered to the clearing agent bank's custodian or a delivery versus payment (DVP)
arrangement must be reached with the selling group company.

Stupid gain (flipping)

Stag profits are the stock market circumstances soon before and just after a company's
first public offering (IPO) (or any new issue of shares). Those that subscribe to the
fresh issue in the hope that the stock price will rise immediately when trading starts
are referred to as "stags." A party or individual's stag profit is the monetary gain they
experience as a result of the rise in share value. The UK is where this word is used
more frequently than the US. Because they buy shares during the offering and sell
them right away on the first trading day, these investors are referred to as "flippers" in
the US.

1.2 REVIEW OF LITERATURE

➢ Sheetal Maurya (2017) is an Indian actress, The current paper examines the
extensive literature on IPO certification mechanisms, with a particular focus
on IPO grading in the Indian new issue market. Earlier research has looked into
the efficacy of IPO grading on a number of fronts, including its ability to reduce
information asymmetry and increase pricing efficiency. Overall, the results of
these research are inconclusive. Earlier research has looked into the efficacy of
IPO grading on several fronts, including its effectiveness in reducing
information asymmetry and bringing pricing efficiency (as measured by
reduced underpricing), its desirability among investor groups (as measured by
subscription rate), its ability to predict short- and long-term performance, post-
listing liquidity of graded IPOs, and return volatility among different graded
IPOs over various time horizons.

12
➢ The initial public offering (IPO) of M B Ragupathy (2011) is a significant
step in a company's financial strategy. Various studies have been conducted to
investigate this cardinal activity. While post–issue stock performance
dominates the IPO literature, valuation and pricing, as well as ownership and
structural problems, come in a close second. Some well-established finance
theories, such as signalling theory and capital structure theory, found support
in IPO research. A relatively fresh stream of study on public offerings focuses
on the impact of institutional investors on several components of the IPO
process. While the majority of the research are conducted in the United States,
there is also a diverse variety of papers available in other countries. This study,
unlike who gives the review based on the IPO process.

➢ Michelle Lowry (2017) is a well-known author. The goal of this chapter is to

give a broad overview of the IPO literature since the year 2000. In recent years,
fewer companies have gone public, which has generated many issues about the
IPO process in academic and regulatory circles. As we all try to figure out
what's going on in the market, it's extremely vital to comprehend the dynamics
that underpin the IPO process. If going public is too expensive or the IPO
mechanism is beset by too many conflicts of interest among the many
middlemen, private companies may reasonably select other ways to raise cash.

➢ Sabrina Severine (2020) is a writer who lives in the United States. The
purpose of this study is to provide a thorough assessment of the literature on
IPO pricing and interactions in the primary market. The role of previous
relationships between issuing firms, investment banks, and institutional
investors, i.e., key participants in the listing process, is the subject of analysis
in the current paper, among the multitude of variables that might affect the way
shares are priced and sold in new offerings. Existing mixed data suggests that
repeated interactions among the primary actors could influence IPO results in
one of two ways: by lowering asymmetric information problems or by deciding
opportunistic behaviour, as evidenced in well-known secondary market pricing
anomalies. Moreover, this study points out the importance of shifting attention
to this market in order to better understand IPO pricing dynamics.

13
➢ Seema Verma, Satish Mittal (2016) The goal of this study is to shed light on
findings from previous research that were undertaken in the context of
analysing long-term performance of IPOs and identifying characteristics that
contribute to bad long-term performance. Apart from that, to determine the
relationship between initial return and long-term performance. In addition,
future prospects will be discussed in order to provide direction for future
research in this field.

➢ Bal winder Singh, Rekha Honda (2017) The current study adds to the
existing literature on underpricing by focusing on the understudied relationship
between corporate governance and underpricing. This endeavour is particularly
unique in that it was one of the first to investigate governance in the context of
underpricing in initial public offerings (IPOs) in India. The study analyses IPO
prospectuses to examine the board structures and ownership characteristics of
404 Indian initial public offerings (IPOs). The variables board size and board
committees have a substantial positive link with the IPO returns on the listing
day, which is supported by the signalling hypothesis.

➢ Ritter (1991) IPOs, 1975-1984, United States of America, 1975-1984, United

States of America, 1975 Cross sectional and time series analysis, quantitative
and event study cumulative average adjusted returns (CAR), Buy and Hold
return (BHR). 75 percent cumulative average adjusted returns (CAR)
determined with monthly portfolio rebalancing, where the adjusted returns are
estimated using many different benchmarks, and 3-year purchase and hold
returns for both the IPOs and a group of matching firms. return on the first day
of listing, return three years later, return three years later, return three years
later, return three years later, return three years The total number of shares sold
multiplied by the gross revenues is the size of the issue. Return 36 months for
three years, where months are defined as consecutive 21-trading-day intervals
from the IPO date. Month 1 has event days 2-22, whereas month 2 has event
days 23-43. In the United States, the average initial return is 16.4 percent. Over
the same three-year holding period, a control sample of 1,526 listed equities,

14
 matched by industry and market value, produced an average total return of
61.86 percent. Long-term underperformance can be shown in the gross
proceeds categories and the initial day return. In the long run, matching firms
outperform IPOs. In comparison to matched firms, the median three-year
return is -16.67 percent.

➢ Public corporations and 3702 SEOs, Loughran and Ritter (1995), USA
Quantitative, Time series regression analysis, Statistics’ T-statistics on issuing
firms' yearly holding-period returns compared to non-issuing firms. statistics
on monthly individual company returns using a time series of cross-sectional
regressions. statistics for portfolios of issuing and non-issuing enterprises using
three-factor time-series regressions on monthly returns. Control variables: size
of issuing firms and book to market effects, market value of equity, book to
market value, annual return for 3 and 5 years, buy and hold return, buy and
hold return, buy and hold return, buy and hold return, buy and hold return, buy
and hold return, buy and hold return, buy and hold return, buy and hold return,
buy and hold return IPOs have a three-year wealth relative of 0.80, whereas
SEOs have a three-year wealth relative of 0.67. For matched firms, the average
Buy and Hold Return (ABHR) is 70%. For IPOs, the median 5-year BHR is
8%, and for IPOs, the median 5-year BHR is 8%.

➢ Chen and Pan (1998), Taiwan, Initial Public Offerings, 1992-1994.

Quantitative, Jensen's alpha model, Fame- French three-factor modal,
Regression, Descriptive statistics are statistics that describe something. Market
factor (market return), size related factor (age, market value), Book to market
ratio, proportion of receiving shares (undersubscribed and oversubscribed) day
after issuance; Market factor (market return), size related factor (age, market
value), Book to market ratio, proportion of receiving shares (undersubscribed
and oversubscribed) day after issuance; Market factor (market return), size
related factor (age, market value), Book to market ratio, proportion of receiving
shares (undersubscribed and oversubscribed) day after issuance Returns over
three years, raw returns, market returns, and adjusted returns. A Fame French
three-factor model is best for assessing long-term performance. The average

15
 initial return is 29.7% (with a median of 32%), and the 3-year holding period
return is 65.64 percent, which is higher than the market return.

➢ IPOs, UK, from 1991 to 1995 Georgian, Khurshid, and Mudambi (1999).
MAR, MARBH, Analyses of quantitative regression, descriptive statistics. For
36 months following the first month of trading, the market-adjusted long-term
returns were estimated. The month-end returns have taken a while. Risk,
ownership dilution, underwriter reputation, firm size, and flotation costs
international diversity, a wide range of products, and the amount of money
raised Signals of globalisation: IPOs perform 17.81 percent worse over the long
run. How the company's shares perform in the market before to going public
provides insight into how they will perform once the company is listed. A
company's management style makes a big statement. The percentage of issued
stock as well as the level of multinationality have an impact on long-term
success. The greater the percentage of stock sold at the time of the offering, the
lower the long-term performance (i.e., the higher the dilution of original share
holdings). In the long run, businesses with high flotation costs (as a percentage
of capital raised), high pre-listing profitability, high initial returns, and high
equity offers perform well.

1.3 OBJECTIVES OF THE STUDY

➢ To compare the issue price and list price of stocks during the past five
years.
➢ To study the role of intermediaries in IPO
➢ To study the procedure of implementing IPO

1.4 SCOPE OF THE STUDY

The study's focus is solely on initial public offerings (IPOs) that are listed on the
National Stock Exchange (NSE) of India. The report will only have a small impact
on Indian investors. With a large sample size, the study can also be carried out
internationally.

16
 CHAPTER 2
RESEARCH METHODOLOGY

2.1 RESEARCH PROJECT DESIGN

The research challenge can be solved methodically using research methodology.

Unless data is collected and analyzed, a methodical approach is necessary to attain
well-defined objectives. Thus, gathering the necessary data is crucial to any
investigation. This study is an example of social science research.
Research is an in-depth, methodical, thorough investigation or analysis carried out
in a particular field of knowledge with the goal of establishing facts or principles.
Discovering, interpreting, and developing strategies and systems to increase human
knowledge of the world and the cosmos is the main goal of applied research.

2.2 DATA COLLECTION

Secondary data
• The study has employed secondary data.
• The secondary data that have been included in the study are issue price, list
price, listing open, listing close and current market price of the IPO stocks
issued from 2018 to 2022.
• The data has been sourced from money control.

2.3 SAMPLING AND POPULATION

Data were collected for a period of past five years (2018 – 2022)

2.4 TOOLS USED FOR ANALYSIS

• Graphical Analysis

17
 CHAPTER 3
DATA ANALYSIS & INTERPRETATION

3.1 ISSUE SIZE – YEAR WISE

ISSUE
YEARS SIZE
2018 24545.96
2019 14272.03
2020 26184.56
2021 104385.12
2022 31851.65

YEARS

120000

100000

80000

60000
104385.12
40000

20000
24545.96 26184.56 31851.65
14272.03
0
2018 2019 2020 2021 2022

INTERPRETATION:

From the above chart, it can be observed that there were 3 years which secured funds
more than Rs.26,100 crores through IPOs in the year. The year 2021 was the year with
the highest secured funds through IPOs compared to the other years.

18
3.2 ISSUE SIZE – INDUSTRY WISE

INDUSTRY ISSUE SIZE

CHEMICALS 23011.26
FINANCE 38009.87
FMCG 12120.27
HEALTHCARE 19051.5
INFRASTRUCTURE 2766.04
SOFTWARE AND IT
SERVICES 15690.49
MISCELLANEOUS 8310.98

38009.87 INDUSTRY
40000
35000
30000 23011.26
25000 19051.5
20000 15690.49
15000 12120.27
8310.98
10000
2766.04
5000
0

INTERPRETATION:

From the above chart, it can be observed that there were 3 industries which secured
funds more than Rs.15,600 crores through IPOs in the year. The three highest fund
secured industries were finance, chemicals and, software and IT services.

19
3.3 ISSUE SIZE IN CHEMICAL COMPANIES

CHEMICALS ISSUE SIZE

HP Adhesives 1376.63
AMI Organics 600
CHEMPLAST SANMA 1354
Tatra Chintan 660
Clean Science 619.23
India Pesticide 7318.15
Laxmi Organic 1030.22
Anupam Rasayan 622.11
Heranba 2073
Indigo Paints 816.57
Chemcon Special 0
Rossari 6273.5
Neogen 1209
Fine Organics 5375
Galaxy Surfacta 2768
CHEMICALS
8000
7000
7318.15
6000
6273.5
5000
5375
4000
3000
2000 2768
2073
1000
1376.63 1354 1209
1030.22 816.57
0 600 660 619.23 622.11
0

INTERPRETATION:

From the above chart, it can be observed that there were 4 companies which secured
funds more than Rs.2,700 crores through IPOs in the year. The highest fund secured
company being India Pesticide while the lowest company being AMI Organics in
chemicals.

20
3.4 ISSUE SIZE IN FINANCE COMPANIES

FINANCE ISSUE SIZE

Home First 1222
Anand Rathi 405.95
Fino Payments 161.09
ABSL AMC 1858
APTUS VALUE 732.27
IRFC 1513
UTI AMC 500
Angel One 9375
CAMS 1546
SBI Card 963.28
Ujjivan Small 800
CSB Bank 521
AAVAS Financier 5550
CreditAccess Gr 909
Indostar Capita 7734.99
ICICI Securitie 2500
Bandhan Bank 453.6

FINANCE

10000 9375
9000 7734.99
8000
7000
5550
6000
5000
4000
3000 2500
1858 1513 1546
2000 1222 963.28 800 909
405.95161.09 732.27 500 521 453.6
1000
0

INTERPRETATION:

From the above chart, it can be observed that there were 3 companies which
secured funds more than Rs.5,000 crores through IPOs in the year. The highest
fund secured company being Angel One and the lowest company being Fino
Payments in finance.

21
3.5 ISSUE SIZE IN FMCG COMPANIES

FMCG ISSUE SIZE

Adani Wilmar 582.91
Sapphire Foods 1175
Bectors Food 582.34
Restaurant Bran 823.7

FMCG
1400
1175
1200

1000
823.7
800
582.91 582.34
600

400

200

0
Adani Wilmar Sapphire Foods Bectors Food Restaurant Bran

INTERPRETATION:

From the above chart, it can be observed that there was 1 company which secured
funds more than Rs.1,100 crores through IPOs in the year. The highest fund secured
company being Sapphire Foods in FMCG.

22
3.6 ISSUE SIZE IN HEALTHCARE COMPANIES

HEALTHCARE ISSUE SIZE

Supriya Lifesci 510
Nureca 596.41
Sigachi Ind 60
Vijaya Diagnost 819.24
Krsnaa Diagnost 100
Windlas Biotech 412.63
Glenmark Life 1153.72
Gland 1170.56
Metropolis 4633
Aster DM Health 300.53

HEALTHCARE
5000 4633
4500
4000
3500
3000
2500
2000
1500 1153.72 1170.56
596.41 819.24
1000 510 412.63 300.53
500 60 100
0

INTERPRETATION:

From the above chart, it can be observed that there were 3 companies which secured
funds more than Rs.1,100 crores through IPOs in the year. The highest fund secured
company being Metropolis and the lowest company being Sigachi Ind in
Healthcare.

23
3.7 ISSUE SIZE IN INFRASTRUCTURE COMPANIES

INFRASTRUCTURE ISSUE SIZE

G R Infra 517.6
Rail Vikas 2159.88
HG Infra Engg 443.69
RITES 600

INFRASTRUCTURE
2500 2159.88
2000
1500
1000
517.6 600
443.69
500
0
G R Infra Rail Vikas HG Infra Engg RITES

INTERPRETATION:

From the above chart, it can be observed that there was 1 company which secured
funds more than Rs.2,100 crores through IPOs in the year. The highest fund secured
company being Rail Vikas and the lowest company being HG Infra Egg in
Infrastructure.

24
3.8 ISSUE SIZE IN SOFTWARE AND IT SERVICES COMPANIES

SOFTWARE AND IT SERVICES ISSUE SIZE

AGS Transact 1844
CMS Info System 4016
Rategain Travel 438.38
Latent View 4229
Nazara 4473
Route 960.94
Happiest Minds 457.7
Newgen Software 980.14

SOFTWARE AND IT SERVICES

5000 4229 4473

4016
4000
3000
1844
2000
960.94 980.14
1000 438.38 457.7
0
AGS CMS Info Rategain Latent Nazara Route Happiest Newgen
Transact System Travel View Minds Software

INTERPRETATION:

From the above chart, it can be observed that there were 4 companies which secured
funds more than Rs.1,800 crores through IPOs in the year. The highest fund secured
company being Nazara and the lowest company being Rate gain Travel in Software
and IT services.

25
3.9 ISSUE SIZE IN MISCELLANEOUS COMPANIES

MISCELLANEOUS ISSUE SIZE

Paras Defence 635.04
PowerGrid InvIT 3125
Antony Waste 474.12
IRCTC 131.48
India mart Inter 1200.18
Xelpmoc Design 430.88
Bharat Dynamics 4750

MISCELLANEOUS
5000 4750

4000
3125
3000

2000
1200.18
1000 635.04 474.12 430.88
131.48
0
Paras PowerGrid Antony IRCTC Indiamart Xelpmoc Bharat
Defence InvIT Waste Inter Design Dynamics

INTERPRETATION:

From the above chart, it can be observed that there were 3 companies which secured
funds more than Rs.1,200 crores through IPOs in the year. The highest fund secured
company being Bharat Dynamics and the lowest company being IRCTC in
miscellaneous.

26
3.10 ISSUE SIZE IN 2021 OF ALL COMPANIES

2021 ISSUE SIZE

ABSL AMC 2768
APTUS VALUE 2790
Car Trade Tech 2998
CHEMPLAST SANMA 3929.91
Clean Science 1546
CMS Info System 1100
Devyani Int 1858
Fino Payments 1209
FSN E-Co Nykaa 5375
Glenmark Life 1513
Home First 1153.72
Indigo Paints 1170.56
IRFC 4633
Kalyan Jeweller 1175
Krsnaa Diagnost 1222
Macrotech Dev 2500
Metro Brands 1376.63
Nuvoco Vistas 5089.29
PB Fintech 6273.5
PowerGrid InvIT 7734.99
Rategain Travel 1354
Sansera Eng 1282
Sapphire Foods 2073
Sona BLW 5550
Star Health 7318.15
Tarsons Product 1030.22
Vijaya Diagnost 1895.04
Zomato 9375

27
 2021
10000
9000
9375
8000
7000 7734.99
7318.15
6000
6273.5
5000 5550
5375 5089.29
4000 4633
3000 3929.91
2998
2790
2000 2768 2500
2073 1895.04
1000 1546 1858
1100 1209 1513 1222 1376.63
1170.56 1175
1153.72 1354
1282 1030.22
0
ABSL AMC

Sona BLW
Sansera Eng

Zomato
FSN E-Co Nykaa

Home First

Krsnaa Diagnost
CHEMPLAST SANMA
Clean Science

PB Fintech

Rategain Travel

Star Health
Glenmark Life
APTUS VALUE

IRFC

Metro Brands
Nuvoco Vistas

PowerGrid InvIT
CarTrade Tech

Fino Payments

Indigo Paints

Kalyan Jeweller

Vijaya Diagnost
CMS Info System

Macrotech Dev

Sapphire Foods

Tarsons Product
Devyani Int

INTERPRETATION:

From the above chart, it can be observed that there were 4 companies which secured
funds more than Rs.6,200 crores through IPOs in the year. The highest fund secured
company being Zomato in 2021.

28
3.11 ISSUE SIZE IN 2020 OF ALL COMPANIES

2020 ISSUE SIZE

Bectors Food 540.54
Restaurant Bran 796.5
Gland 6479.55
Equitas Bank 517.6
UTI AMC 2159.88
Mazagon Dock 443.69
Angel One 600
CAMS 2244.33
Chemcon Special 318
Route 600
Happiest Minds 702.02
Rossari 496.25
SBI Card 10286.2

2020
12000

10000

8000

6000
10286.2
4000
6479.55
2000
2159.88 2244.33
0 540.54 796.5 517.6 443.69 600 318 600 702.02 496.25

INTERPRETATION:

From the above chart, it can be observed that there were 4 companies which secured
funds more than Rs.2,100 crores through IPOs in the year. The highest fund secured
company being the SBI Card in 2020.

29
3.12 ISSUE SIZE IN 2019 OF ALL COMPANIES

2019 ISSUE SIZE

Prince Pipes 500
Ujjivan Small 750
CSB Bank 409.68
IRCTC 635.04
Sterling Wilson 3125
India mart Inter 474.12
Neogen 131.48
Metropolis 1200.18
Rail Vikas 430.88
Embassy Office 4750
MSTC 213.81
Chalet Hotels 1628.84
Xelpmoc Design 23

2019

5000
4500
4000 4750
3500
3000
2500 3125
2000
1500
1000 1628.84
500 1200.18
750
0 500 409.68635.04 474.12 430.88 213.81
0 131.48 23

INTERPRETATION:

From the above chart, it can be observed that there were 4 companies which secured
funds more than Rs.1,200 crores through IPOs in the year. The highest fund secured
company being the Embassy Office in 2019.

30
3.13 ISSUE SIZE IN 2018 OF ALL COMPANIES

2018 ISSUE SIZE

AAVAS Financier 1729.2
Credit Access Gr 1126.44
TCNS Clothing C 1121.98
Fine Organics 597.87
RITES 453.6
Indo star Capita 1844
ICICI security 4016
Mishra Dhatu Ni 438.38
Hindustan Aeron 4229
Bandhan Bank 4473
Bharat Dynamics 960.94
HG Infra Engg 457.7
Aster DM Health 980.14
Galaxy Surfactant 937.09
Amber Enterprise 600
Newgen Software 424.62
Apollo Micro Sy 156
2018
5000
4500
4000 4473
4229
3500 4016
3000
2500
2000
1500 1729.2 1844
1000
500 1126.44
1121.98 960.94 980.14
937.09
0 597.87453.6 438.38 457.7 600424.62
0 156

INTERPRETATION:

From the above chart, it can be observed that there were 5 companies which secured
funds more than Rs.1,700 crores through IPOs. Out of the 5 companies, 4 were from
finance-based companies.

31
 CHAPTER 4
SUMMARY AND SUGGESTIONS

4.1 SUMMARY OF FINDINGS

According to the data, there were three years in which IPOs successfully raised more
than Rs. 26,100 crores. Compared to other years, 2021 had the biggest amount of
secured capital raised through IPOs.

The research states that three industries were successful in raising more than Rs.
15,600 crores through initial public offerings (IPOs) throughout the course of the year.
The industries with the highest levels of financial security were finance, chemicals,
software and IT services.

In the course of the year, three businesses raised more than Rs. 5,000 crores through
initial public offerings (IPOs). The company with the least stable finances is Fino
Payments, while the most stable is Angel One.

A conclusion drawn from the study is that only one firm raised more than Rs. 1,100
crores through an initial public offering (IPO) during the year. Sapphire Foods, an
FMCG firm, has secured the most funding.

Based on the data, it can be concluded that three firms raised more than Rs. 1,100
crores through initial public offerings (IPOs) during the year. In the healthcare sector,
Sigachi Ind is the least-secured corporation and Metropolis is the highest.

One business raised more than Rs. 2,100 crores through IPOs throughout the year,
according to the analysis, which shows. Rail Vikas secured the most money, and HG
Infra Engg secured the least amount of money.

4.2 LIMITATIONS OF THE STUDY

I. The research data used for the study is sourced from published information.
II. The study is used the secondary data for examine the role of IPO

Therefore, the accuracy of the data depends on the accuracy ensured in the data
presented.

32
4.3 CONCLUSION
The data shows three years where IPOs were successful in raising more than Rs.
26,100 crores. In contrast to prior years, 2021 saw the greatest amount of secured
capital generated through IPOs. According to the study, during the course of the
year, three industries were successful in raising more than Rs. 15,600 crores through
initial public offers (IPOs). Finance, chemicals, software and IT services have the
highest degrees of financial stability. Three companies raised more than Rs. 5,000
crores through initial public offerings during the course of the year (IPOs). Fino
Payments has the least solid financial situation, while Angel One has the best. In
2021 online platform and hospitality secured more funds through IPO when
compared to other companies due to covid pandemic. Some companies need to
improve their performance to obtain more funds.

BIBLIOGRAPHY
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[4] Dhamija, S., & Arora, R. K. (2014). The Long-Run Performance of Graded IPOs
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[5] Gompers, P.A. & Lerner, J., (2003). The Really Long-Run Performance of
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[6] Miller, M.E, (2000) Long Run Underperformance of Initial Public offering.
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[8] Allen, F., and G. R. Faulhaber, 1989, Signaling by underpricing in the IPO
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[9] Hanley, K. 1993, The Underpricing of initial public offerings and the partial adjustment
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34