“INITIAL PUBLIC OFFERING – INDIA”

A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE DEGREE OF
BACHELOR IN COMMERCE (ACCOUNTING AND FINANCE) UNDER
FACULTY OF COMMERCE
2019-2020

BY
MISS ANJALI BASANTILAL JAIN

UNDER THE GUIDANCE OF

PROF. JINEN JADHAV

SMT. MITHIBAI MOTIRAM KUNDNANI COLLEGE OF COMMERECE &

ECONOMICS, BANDRA WEST, MUMBAI – 400 050

MARCH – 2020

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 “INITIAL PUBLIC OFFERING – INDIA”

A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE DEGREE OF
BACHELOR IN COMMERCE (ACCOUNTING AND FINANCE) UNDER
FACULTY OF COMMERCE
2019-2020

BY
MISS ANJALI BASANTILAL JAIN

UNDER THE GUIDANCE OF

PROF. JINEN JADHAV

SMT. MITHIBAI MOTIRAM KUNDNANI COLLEGE OF COMMERECE &

ECONOMICS, BANDRA WEST, MUMBAI – 400 050

MARCH – 2020

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 SMT. MITHIBAI MOTIRAM KUNDNANI COLLEGE OF COMMERECE &
ECONOMICS, BANDRA WEST, MUMBAI – 400 050

CERTIFICATE

This is to certify that MS. ANJALI BASANTILAL JAIN has worked and duly completed her project work
for the degree of BACHELOR OF COMMERCE (ACCOUNTS & FINANCE) under the faculty of
commerce in the subject of PROJECT WORK and his project is entitled, “INITIAL PUBLIC OFFERINGS -
INDIA” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and investigation.

Mr. Jinen Jadhav

(Guiding teacher)

Date of submission

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 DECLARATION

I the undersigned MS. ANJALI BASANTILAL JAIN here by, declare that the work embodied in this
project work titled “STUDY OF REGISTRATION UNDER GST” forms my own contribution to research
work carried out under the guidance of “MR. JINEN JADHAV” is a result of my own research work and has
not been previously submitted to any other University for any other Degree/Diploma to this or any other
university.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Ms. Anjali Basantilal Jain

Certified by

Mr. Jinen Jadhav

(Guiding teacher)

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 ACKNOWLEDGEMENTS

To list who all helped me is difficult they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the UNIVERSITY OF MUMBAI for giving me chance to do this project.

I would like to thank my PRINCIPAL, DR. CA. KISHORE .S. PESHORI for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator MS. AFSHA KIRKIRE for his moral support and guidance.

I would also like to express my sincere gratitude towards my project guide MR. JINEN JADHAV whose
guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference, books and magazines
related to my project. Lastly, I would like to thank each and every person who directly or indirectly help me
in the completion of the project especially my Parents and Peers who supported me throughout my project.

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 INDEX

CHAPTER NO. PARTICULARS PAGE NO.

1. INTRODUCTION 7-31
2. RESEARCH METHODOLOGY 32- 34
3. LITERATURE REVIEW 35-41
4. DATA ANALYSIS, PRESENTATION ANDINTERPRETATION 41-60
5. CONCLUSION AND SUGGESTIONS 61-62
BIBLIOGRAPHY 63
ANNEXURE 64-81

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 CHAPTER NO. 1 INTRODUCTION

INTRODUCTION TO INITIAL PUBLIC OFFERINGS (IPO)

Running a business requires a great deal of capital. Capital can take different forms, from human and labour
capital to economic capital. But when most of us hear the term financial capital, the first thing that comes to
mind is usually money. Financial capital is represented by assets, securities, and yes, cash. Having access to
cash can mean the difference between companies expanding or staying behind and being left in the lurch.
But how can companies raise the capital they need to keep them going and to fund their future projects? And
what options do they have available?

There are two types of capital that a company can use to fund operations: Debt and equity. Debt capital is
also referred to as debt financing. Funding by means of debt capital happens when a company borrows
money and agrees to pay it back to the lender at a later date. Equity capital, on the other hand, is generated
not by borrowing, but by selling shares of company stock.

Normally, a company is started with equity finance as its first source of capital from the owners or promoters
of that company. After a certain level of growth, there is a requirement for more capital for further growth.
The company then finds an investor in the form of friends, relatives, venture capitalists, mutual funds, or any
such small group of investors and issue fresh equity shares to these investors.

A point comes where the company reaches a very big level and requires huge capital investment for business
growth. Initial Public Offer (IPO) is the offer of shares which the company makes to the general public for
the first time. And Further Public Offers (FPO) are more such offers in future to the public.

INITIAL PUBLIC OFFERING (IPO)

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public
in a new stock issuance. Public share issuance allows a company to raise capital from public investors. The
transition from a private to a public company can be an important time for private investors to fully realize
gains from their investment as it typically includes share premiums for current private investors. Meanwhile,
it also allows public investors to participate in the offering.

Prior to an IPO, a company is considered to be private – with a smaller number of shareholders, limited to
accredited investors and/or early investors. After an IPO, the issuing company becomes a publicly listed
company on a recognized stock exchange. Thus, an IPO is also commonly known as “going public”.

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Further Public Offer (FPO)

If an already listed company, which has gone through an IPO, offers new or in better words, additional
shares to the public for sale, so as to expand their equity base or pay off debts, it is known as Follow-on
Public Offer or Further Public Offer (FPO)

Capital Market

The capital market is an important constituent of financial system. Capital market is one of the significant
aspects of every financial market. It is a market for the long term funds- both debt and equity – and funds
raised within and outside the country. It provides long term debt and equity finance for the government and
the corporate sector. The capital market aids economic growth by mobilizing the savings of the economic
sectors and directing the same towards channels of productive use.

Capital market can be classified into primary and secondary markets. The primary market is a market for
new shares, where as in the secondary market the existing securities are traded. Capital market institutions
provide rupee loans, foreign exchange loans, consultancy services and underwriting. Capital Market plays an
important role in the economy of a country as it serves two functions all at once. First, Capital Market serves
as an alternative for a company's capital resources. The capital gained from the public offering can be used
for the company's business development, expansion, and so on. Second, Capital Market serves as an
alternative for public investment. People could invest their money according to their preferred returns and
risk characteristics of each instrument.

Hence the development of an efficient capital market is necessary for creating a climate conducive to
investment and economic growth. Indian capital market started its journey from the eighteenth century and
has faced many problems, scams during the journey. However, the Indian capital market at present is well
organized, fairly integrated, mature, more global and modernized. The Indian equity market is one of the
best in the world in terms of technology.

Primary market in India

A good capital market is an essential prerequisite for the industrial and commercial development of a
country. Capital market is a central coordinating and directing mechanism for free and balanced flow of
financial resources into the economic system operating in a country. It helps the companies who require
capital to expand, modernize or diversify their business. To get the capital that is required by the company it
usually goes for the issue of shares and the process of issuing of shares is done in the primary market.

The primary market in the simplest terms can be defined as a market where the securities are sold in order to
raise the funds or the capital required by the company. It is a market for new issues i.e. a market for fresh
capital. It provides the channel for sale of new securities. The securities can be in many forms such as equity

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shares, preference shares, debt instruments, bonds etc. The primary issue market is that component of the
capital markets that deals with the issuance of new securities. Companies, governments or public sector
institutions can obtain funding through the sale of a new stock. In the case of a new stock issue, this sale is
an initial public offering (IPO).

The issuing firm collects money, which is then used to finance its operations or expand business, by selling
its shares. Before selling a security on the primary market, the firm must fulfill all the requirements
regarding the exchange. After trading in the primary market the security will then enter the secondary
market, where numerous trades happen every day. The primary market accelerates the process of capital
formation in a country’s economy. The primary market categorically excludes several other new long-term
finance sources, such as loans from financial institutions. Many companies have entered the primary market
to earn profit by converting its capital, which is basically a private capital, into a public one, releasing
securities to the public. This phenomena is known as “public issue” or “going public.” When a company lists
its shares on a public exchange, it will almost invariably look to issue additional new shares in order at the
same time. The money paid by investors for the newly-issued shares goes directly to the company (in
contrast to a later trade of shares on the exchange, where the money passes between investors).

An offer in primary market, therefore, allows a company to tap a wide pool of stock market investors to
provide it with large volumes of capital for future growth. The company is never required to repay the
capital, but instead the new shareholders have a right to future profits distributed by the company and the
right to a capital distribution in case of dissolution. The existing shareholders see their shareholdings diluted
as a proportion of the company's shares. However, they hope that the capital investment will make their
shareholdings more valuable in absolute terms. In addition, once a company is listed, it is able to issue
further shares via a rights issue, thereby again providing itself with capital for expansion without incurring
any debt. This regular ability to raise large amounts of capital from the general market, rather than having to
seek and negotiate with individual investors, is a key incentive for many companies seeking to list.

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LAWS GOVERNING INITIAL PUBLIC OFFER

Planning for an IPO is like conducting a symphony – it has several facets, each intrinsically linked to the
other. In addition to other laws applicable to specific elements, in India, the key regulations which cover or
prescribe requirement in relation to preparation of financial information are:

1. The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the SEBI ICDR
Regulations)

2. SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (the Listing Regulations)

3. The Companies Act, 2013 (2013 Act).

The above mentioned regulations are vast and complex. Once an entity is listed on a stock exchange, it
continuously needs to adhere to the Listing Regulations and the 2013 Act.

Common conditions for public issues and rights issues

General conditions

An issuer offering specified securities through a public issue is required to satisfy all conditions for such
issues at the time of filing draft offer document with the Securities and Exchange Board of India (SEBI) and
at the time of registering or filing the final offer document with the Registrar of Companies (ROC) or
designated stock exchange, as the case may be

An issuer can make a public issue or rights issue of specified securities, only if:

– None of its promoters, promoter group or directors or persons in control of the issuer, are debarred from
accessing the capital market by the SEBI

– None of its promoters, directors or persons in control of the issuer were or are a promoter, director or
person in control of any other entity which is debarred from accessing the capital market under any order or
directions made by the SEBI

– It has made an application to one or more recognised stock exchanges for listing of specified securities on
such stock exchanges and has chosen one of them as the designated stock exchange

– In case of an Initial Public Offer (IPO), the issuer has made an application for listing of specified securities
in at least one recognised stock exchange having nationwide trading terminals

– It has entered into an agreement with a depository for dematerialisation of specified securities already
issued or proposed to be issued

– All existing partly paid-up equity shares of the issuer have either been fully paid up or are forfeited
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– Firm arrangements of finance through verifiable means towards 75 per cent of the stated means of finance,
excluding the amount to be raised through the proposed public issue or rights issue or through existing
identifiable internal accruals, have been made.

Appointment of merchant bankers and other intermediaries

Merchant bankers - The issuer should appoint one or more merchant bankers, at least one of whom should
be a lead merchant banker and should also appoint other intermediaries (only those who are registered with
SEBI), in consultation with the lead merchant banker (who should prior to the appointment of such
intermediaries, independently assess their capabilities), to carry out the obligations relating to the issue.
Where the issue is managed by more than one merchant banker, the lead merchant banker should delineate
the activity-wise allocation of responsibilities and at the time of filing the draft offer document with SEBI,
submit an intimation to SEBI, signed by all the lead merchant bankers to the issue, which would include the
name of the lead merchant banker responsible for each set of the activities or sub-activities.

Underwriter- If the issuer making a public issue (other than through the book building process) or a rights
issue, desires to have the issue underwritten, it shall appoint the underwriters in accordance with the
Securities and Exchange Board of India (Underwriters) Regulations, 1993. In case the issuer is making a
public issue through the book building process, the issue will be underwritten by book runners or syndicate
members. The issuer is required to enter into an underwriting agreement with the book runner, who in turn
enters into an underwriting agreement with syndicate members. The agreement indicates the number of
specified securities that the underwriter is required to subscribe to at the predetermined price in the event of
an under-subscription in the issue. The lead merchant bankers or the lead book runners, as the case may be,
are required to undertake minimum underwriting obligations, as specified in the Securities and Exchange
Board of India (Merchant Bankers) Regulations, 1992 in case of every underwritten issue. Where the
syndicate members fail to fulfil their underwriting obligations, the lead book runner will fulfil the same.

Offer and other documents

Filing of an offer document

An issuer, prior to making a public issue or a rights issue (where the aggregate value of the specified
securities offered in such rights issue is RS. 50 lakhs or more), other than a fast track issue should file a draft
offer document along with fees specified in Schedule IV of the ICDR Regulations with SEBI, through the
lead merchant banker at least 30 days prior to registering the prospectus, red herring prospectus or shelf
prospectus with the ROC or filing the letter of offer with the designated stock exchange, as the case may be.

Post the receipt of the draft offer document as above, SEBI may specify changes or issue observations (if
any) on the draft offer document within 30 days from the later of the following:

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12 | P a g e – Date of receipt of the draft offer document

– Where SEBI had sought any clarification or additional information from the lead merchant bankers to the
issue, the date of receipt of a satisfactory reply from them

– Where the SEBI had sought any clarification or information from any regulator or agency, the date of
receipt of clarification or information from such regulator or agency

– The date of receipt of a copy of an in-principle approval letter issued by the recognised stock exchanges.

Documents to be submitted before opening of the issue

The lead merchant bankers should submit the following documents to SEBI along with the draft offer
document:

– A certificate in the format specified in Schedule II of the ICDR Regulations, confirming that an agreement
has been entered into between the issuer and the lead merchant banker

– A due diligence certificate as per Form A of Schedule VI of the ICDR Regulations

– A certificate confirming compliance of the conditions specified in Part C of Schedule VIII of the ICDR
Regulations.

Draft offer document to be made public

The issuer should make public, for comments, the draft offer document which has been filed with SEBI, for
a period of at least 21 days from the date of such filing, by hosting it on the websites of SEBI or the
recognised stock exchanges where specified securities are proposed to be listed and merchant bankers
associated with the issue. The issuer should, either on the date of filing of the draft offer document with
SEBI, or on the next day, make a public announcement in an English newspaper with wide circulation, one
Hindi newspaper with wide circulation and one regional language newspaper with wide circulation at the
place where the registered office of the issuer is situated, disclosing to the public that the draft offer
document has been filed with SEBI and inviting them to give their comments to SEBI in respect of
disclosures made in the draft offer document. After the expiry of the stipulated period (i.e. 21 days), the lead
merchant banker is required to file with SEBI a statement giving information of the comments received by
them or the issuer on the draft offer document during that period and the consequential changes, if any, to be
made in the draft offer document.

Security deposit

Before opening of subscription list, the issuer should in case of a public issue or a rights issue (other than a
fast track issue of specified securities), place a deposit amounting to one per cent of the amount of securities

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offered for subscription to the public with the stock exchanges in the manner specified by SEBI and/or the
stock exchange(s). This amount is refundable or forfeitable in the manner specified by SEBI.

Opening of an issue

Post compliance with the 2013 Act requirements, a public issue or rights issue may be opened within 12
months from date of issuance of the observations by SEBI or within three months of expiry of the period as
specified in the ICDR Regulations. For fast track issues, the issue should open within the period stipulated in
the 2013 Act.

Public issue and rights issue of specified securities

Dispatch of issue material

The lead merchant banker is required to dispatch the offer document and other issue material including
forms for Applications Supported by Blocked Amount (ASBA) to the designated stock exchange, syndicate
members, registrar to issue, etc.

Minimum subscription

For an IPO of specified securities, the minimum subscription to be received should not be less than 90 per
cent of the offer through the offer document; subject to allotment of minimum number of specified securities
as prescribed in the Securities Contracts (Regulations) Rules, 1957

Allotment, refund and payment of interest

The issuer and merchant bankers should ensure that the specified securities are allotted and/or application
monies are refunded within 15 days from the date of closure of the issue. Failure of this would tantamount to
the issuer paying an interest at such rate and within such time as is disclosed in the offer document

Conditions for listing of securities on stock exchanges

The issuer or issuing entity should obtain an in-principle approval from the recognised stock exchanges. The
issuer or the issuing entity should complete the pre-listing formalities within the timelines specified by
SEBI. The stock exchange should within 30 days from the later of the following dates, either grant an in-
principle approval/list the securities or reject the application for in-principle approval/listing of securities
made by the issuer or issuing entity:

– The date of receipt of application for in-principle approval/listing from issuer or the issuing entity

– The date of receipt of satisfactory reply from the issuer or the issuing entity, in cases where the stock
exchanges has sought any clarification from them.

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An issuer or the issuing entity desirous of listing its securities on a recognised stock exchange should
execute a listing agreement with such stock exchange.

Provisions as to public issue

Eligibility requirements

A. Entry Norm I (Profitability route)

a) Net tangible assets of at least RS.3 crore in each of the preceding three full years of which not more than
50 per cent are held in monetary assets. However, the limit of 50 per cent on monetary assets would not be
applicable in case the public offer is made entirely through offer for sale

b) Minimum of RS.15 crore as average pre-tax operating profit in at least three years of the immediately
preceding five years

c) Net worth of at least RS.1 crore in each of the preceding three full years

d) If there has been a change in the entity’s name, at least 50 per cent of the revenue for preceding one year
should be from the new activity denoted by the new name

e) The aggregate of the proposed issue and all previous issues made in the same financial year in terms issue
size should not exceed five times the pre-issue net worth as per the audited balance sheet of the preceding
financial year.

B. Entry Norm II (QIB route)

When entry norm I conditions are not fulfilled, an issue would be carried through a book building route,
with at least 75 per cent of the net offer to the public to be mandatorily allotted to the QIBs. The entity
should refund the subscription money if the minimum subscription of QIBs is not attained.

Pricing in public issue

An issuer may determine the price of specified securities and determine the coupon rate and conversion price
of convertible debt instruments in consultation with the lead merchant banker or through the book building
process. Differential pricing is permissible in a public issue to retail individual investors and retail individual
shareholders.

Promoter’s contribution

In a public issue by an unlisted issuer, a minimum of 20 per cent of the post issue capital of the entity
should be contributed by the promoters. In the case of listed entities, promoter’s contribution either to the
extent of 20 per cent in issue or to ensure post issue holding of 20 per cent of the issue size. For promoters,

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there is a lock-in for a period of three years from the date of allotment or from the date of commencement of
commercial production, whichever is later.

Minimum offer to public, reservations, etc.

The minimum net offer to the public should be made in the following manner:

a) In case the issuer’s post issue capital calculated at offer price is less than or equal to RS.1,600 crore, then
at least 25 per cent of each class or kind of ‘equity shares’ or ‘debenture convertible into equity shares’
should be issued

b) In case the issuer’s post issue capital calculated at offer price is more than RS.1,600 crore but less than or
equal to RS.4,000 crore, then at least such percentage of each class or kind of ‘equity shares’ or ‘debentures
convertible into equity shares’ which is equivalent to the value of RS.4,000 should be issued (the issuer
should increase its public shareholding to at least 25 per cent within a period of three years from the date of
listing of the securities, in the manner specified by the SEBI)

c) In case the issuer’s post issue capital calculated at offer price is above RS.4,000 crore, then at least 10 per
cent of each class or kind of ‘equity shares’ or ‘debentures convertible into equity shares’ should be issued
(the issuer should increase its public shareholding to at least 25 per cent within a period of three years from
the date of listing of the securities, in the manner specified by the SEBI).

FACTORS CONTRIBUTING IPO PERFORMANCE

Prospectus

A prospectus is a document issued by the company inviting the public and investors for the subscription of
its securities. A prospectus also helps in informing the investors about the risk of investing in the company.
A Prospectus is required to be issued only after the incorporation of the company. These documents describe
stocks, bonds and other types of securities offered by the company. Mutual fund companies also provide a
prospectus to prospective clients, which include a report of the money’s strategies, the manager’s
background, the fund’s fee structure and a fund’s financial statements. A prospectus is always accompanied
by performance history and financial information of the company. The reason for accompanying such
information along with the prospectus is to make sure that, the investors are well aware of the company’s
background and overall performance and the investors do not fall into the prey of investing in a bad
company.

Definition of Prospectus under the Companies Act, 2013

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Section 2(70) of the Act defines prospectus as, “A prospectus means any document described or issued as a
prospectus and includes a red herring prospectus referred to in section 32 or shelf prospectus referred to in
section 31 or any notice, circular, advertisement or other document inviting offers from the public for the
subscription or purchase of any securities of a body corporate.”

Thus, it is clear from the above definition of the prospectus that, a prospectus is a just an invitation to offer
securities to the public and not an offer in the contractual sense.

Types of Prospectus under the Companies Act, 2013

There are four types of a prospectus, which are as under:

1. Abridged Prospectus

According to Section 2(1) of the Act, abridged prospectus means a memorandum containing such salient
features of a prospectus as may be specified by the SEBI by making regulations in this behalf. It means that
a company cannot issue application form for purchase of securities unless such form is accompanied by an
abridged prospectus.

2. Deemed Prospectus

According to Section 25(1) of the Act, where a company allots or agrees to allot any securities of the company with a
view to all or any of those securities being offered for sale to the public. Any document by which such offer for sale to
the public is made is deemed to be a prospectus by implication of law.

3. Shelf Prospectus

According to Section 31 of the Act, Shelf prospectus is a prospectus in respect of which the securities or
class of securities included therein are issued for subscription in one or more issues over a certain period
without the issue of a further prospectus. Only the companies which have been prescribed by the SEBI can
issue a Shelf prospectus with the Registrar.

4. Red Herring Prospectus (RHP)

According to Section 32 of the Act, an RHP means a prospectus which does not have complete particulars
on the price of the securities offered and quantum of securities to be issued. A company may issue an RHP
prior to the issue of a prospectus. The company shall file RHP with Registrar at least three days prior to the
opening of the subscription list and the offer. An RHP carries the same obligations as are applicable to a
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prospectus and any variation between the RHP and a prospectus shall be highlighted as variations in the
prospectus

Matters to be stated in a prospectus

Under the Companies Act, 2013

 According to Section 26 of the Act, every prospectus issued by or on behalf of a company must be dated
and that date shall unless the contrary is proved, be regarded as the date of its publication.

 It shall state such information and set out such reports on financial information as may be specified by the
SEBI in consultation with the Central Government.

 A copy of the prospectus shall be signed by every director or proposed director or by his agent must be
delivered to the registrar on or before the date of publication.

 Every prospectus issued to the public should mention that a copy of the prospectus along with the
specified documents has been filed with the registrar.

 If prospectus includes a statement made by an expert, the expert must not be engaged or interested in the
formation or promotion or in the management of the company. A written consent of the expert should
also be obtained before the issue of prospectus with the statement.

 A prospectus must not be issued more than 90 days after the date on which a copy thereof is delivered for
registration. If a prospectus is issued it will be deemed to be a prospectus even if copy of which has not
been delivered to the registrar.

 A prospectus shall make a declaration about the compliance of the provisions of the act and nothing
contained in the prospectus is in contravention of the provisions of the Companies Act, Securities
Contracts (Regulation) Act, 1956 and Securities Exchange Board of India Act, 1992.

 Section 27 of the Act states that a company can vary the terms of a contract referred to in the prospectus
or objects for which the prospectus was issued, subject to the approval of an authority given by the
company in general meeting by way of special resolution. The details of the notice in respect of such
resolution to shareholders shall also be published in the newspapers in the city where the registered office
of the company is situated.

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UNDERWRITING In IPOs

Underwriting is an agreement, entered into by a company with a financial agency, in order to ensure that the
public will subscribe for the entire issue of shares or debentures made by the company. The financial agency
is known as the underwriter and it agrees to buy that part of the company issues which are not subscribed to
by the public in consideration of a specified underwriting commission. The underwriting agreement, among
others, must provide for the period during which the agreement is in force, the amount of underwriting
obligations, the period within which the underwriter has to subscribe to the issue after being intimated by the
issuer, the amount of commission and details of arrangements, if any, made by the underwriter for fulfilling
the underwriting obligations. The underwriting commission may not exceed 5 per cent on shares and 2.5 per
cent in case of debentures.

Underwriting has become very important in recent years with the growth of the corporate sector. It provides
several BENEFITS to a company:-

 It relieves the company of the risk and uncertainty of marketing the securities.
 Underwriters have an intimate and specialized knowledge of the capital market. They offer valuable
advice to the issuing company in the preparation of the prospectus, time of floatation and the price of
securities, etc. They also provide publicity service to the companies which have entered into
underwriting agreements with them.
 It helps in financing of new enterprises and in the expansion of the existing projects.
 It builds up investors’ confidence in the issue of securities.
 The issuing company is assured of the availability of funds. Important projects are not delayed for
want of funds.
 It facilitates the geographical dispersal of securities because generally, the underwriters maintain
contacts with investors throughout the country.

UNDERWRITERS

To act as an underwriter, a certificate of registration must be obtained from Securities and Exchange Board
of India (SEBI). The certificate is granted by SEBI under the Securities and Exchanges Board of India
(Underwriters) Regulations, 1993. These regulations deal primarily with issues such as registration, capital
adequacy, obligation and responsibilities of the underwriters. Under it, an underwriter is required to enter
into a valid agreement with the issuer entity and the said agreement among other things should define the
allocation of duties and responsibilities between him and the issuer entity. These regulations have been

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further amended by the Securities and Exchange Board of India (Underwriters) (Amendment) Regulations,
2006.

MERCHANT BANKERS

 The merchant bankers are those financial intermediaries involved with the activity of transferring
capital funds to those borrowers who interested in borrowing.
 They guarantee the success of issues by underwriting them.
 Merchant banks are popularly known as “issuing and accepting houses”.
 Unlike in the past, their activities are now primarily non-fund based (fee based).

They offer a package of financial services. The basic function of merchant banks is marketing corporate and
other services that are guaranteeing sales and distribution of securities and also other activities such as
management of customer services, portfolio management of customer services, portfolio management, credit
syndication, acceptance credit, counselling, insurance, etc.

As per SEBI (Merchant bankers) Rules, 1992:

“Merchant bankers means any person who is engaged in the business of issue management either by making
arrangements regarding selling, buying or subscribing to securities or acting as manager, consultant, advise
or rendering corporate advisory service in relation to such issue management.”

Merchant Banking

Merchant banking activity was formally initiated into the Indian capital markets when grind lays bank
received the license from reserve bank in [Link] started with management of capital
issues ,recognized the needs of emerging class of entrepreneurs for diverse financial services ranging from
production planning and system design to market research .even it provides management consulting services
to meet the requirements of small and medium sector rather than large sector. Citibank setup its merchant
banking division [Link] various tasks performed by this divisions namely assisting new
entrepreneur ,evaluating new projects ,raising funds through borrowing and issuing equity. Indians banks
started banking services as a part multiple services they offer to their clients from [Link] bank of India
started the merchant banking division in [Link] the initial years the SBI’S objective was to render corporate
advice and assistance to small and medium entrepreneurs.

19
ISSUE MANAGEMENT
Management of issue involves marketing of corporate securities viz. equity shares, preference shares and
debentures or bonds by offering them to public. Merchant banks act as per SEBI guidelines, the merchant
banker arranges a meeting with company representatives and advertising agents to finalize arrangements
relating to date of opening and closing of issue, registration of prospectus, launching publicity campaign and
fixing date of board meeting to approve and sign prospectus and pass the necessary resolutions. Pricing of
issues is done by the companies in consultant with the merchant bankers.

Managers, Consultanats And Advisers Of The Issue:

The managers of the issue assist in the drafting of prospectus, application forms and completion of
formalities under the companies act, appointment of registrar for dealing with share applications and transfer
and listing of shares of the company on the stock exchange. Companies can appoint one or more agencies as
managers to the issue.

Underwriting Of Public Issue:

Underwriting is a guarantee given by the underwriter that in the event of under subscription, the amount
underwritten would be subscribed by him. Merchant banking subsidiaries cannot underwrite more than 15%
of any issue.

IMPORTANCE OF ASBA IN IPOS

ASBA provides an alternative mode of payment in issues whereby the application money remains in the
investor's account till finalization of basis of allotment in the issue.
ASBA is an acronym for Applications Supported by Blocked Amounts. It is a process developed by the
Securities and Exchange Board of India (SEBI) to apply for IPOs. An ASBA is simply an application, which
authorizes banks to block funds in the applicants (our, i.e., investors) account.

ASBA process facilitates investors bidding with multiple options, to apply through Self Certified Syndicate
Banks (SCSBs), in which the investors have bank accounts. SCSBs are those banks which satisfy the
conditions laid by SEBI. SCSBs would accept the applications, verify the application, block the fund to the
extent of bid payment amount, upload the details in the web based bidding system of NSE, unblock once
basis of allotment is finalized and transfer the amount for allotted shares, to the issuer.

As per SEBI circular no CIR/CFD/POLICY CELL/11/2015 dated November 10, 2015. All shall mandatorily
use only Application Supported by Blocked Amount (ASBA) facility for all issues opening from 01 January,
2016 onwards.
20
Registration procedure of Self Certified Syndicate Bank (SCSB): In order to register with the Exchange the
SCSB has to submit a onetime undertaking as per the prescribed format. Well, the blocked fund is the
amount that is reserved for buying shares in ASBA IPO. It is 'blocked' because it cannot be withdrawn by the
investor until the IPO application process is done.
The amount is debited from an investor's account only if he/she is selected for ASBA IPO allotment. In such
a case, the required amount is debited from the investor's account, and equivalent shares are credited in the
Demat account. In case if the investor is not selected, then the blocked amount becomes unblocked, available
to be used again normally.

ASBA was introduced by SEBI back in 2008. Before the introduction of ASBA, cheques were preferred as a
mode of payment. However, they caused various problems for the investors, like they had to pay all the fees
upfront at bidding time and refunds through cheques took a very long [Link] the reason ASBA was
introduced as an alternative to this traditional method of payment. Now, let's talk about the various SCBS
which offer the ASBA account facility.

Eligibility:

 Investors are required to be Retail Investors, i.e., the one who's making an investment of at most two
lakhs.
 The investors applying for ASBA must have an account in the SCSB they're applying from.
 ASBA applicants are not allowed to revise their bids.
 ASBA applicants are not eligible to bid under any reserved category of investors (decided by the IPO
issuing company).
 ASBA applicants should allow blocking of funds in their accounts till the allotment date.
 ASBA applicants must bid at a cut-off price in IPOs (i.e., issue price as decided by the company).
 You must have a Demat account, along with a valid PAN.

ASBA Application Process:

The application process can be carried out both online and offline, depending on your choice.

For online applicants:

First, make sure your bank provides an ASBA facility to you, and you have an Internet banking facility.

 Log in to the Internet banking portal of your bank.

 Choose the IPO application process and fill in your required details.
 You'll need to provide information such as DP ID, Bid quantity, Bank account number, PAN, and
Client ID.
21
For offline applicants:

 Visit any branch of your SCSB bank (there's no need to have an account in this branch).
 Download the ASBA bid-cum application form, which is available on the BSE and NSE websites.
 Put all the necessary details in this form, similar to the online process, and submit it to the branch.
 After the acknowledgment of your application, the required amount will be blocked by your bank.
 The applicants can also check the status of their application on NSE and BSE websites.

Closure
The ASBA Application Process must be filled correctly, as any discrepancies found in the application
will lead to rejection. Sometimes this becomes a prominent reason for not getting the ASBA IPO
allotment.

IPO PRICING

The company, with assistance from the underwriters decides on the price band of the shares and also decides
the number of shares to be sold.

There are two types of issues:

A. Fixed Price IPO

If the shares are offered at a fixed price, such is issue is known as Fixed price issue. In the offer document,
the issuer has to give the reasoning and proper justification for the price fixed. Generally, companies go for
fixed price issue only when the management is of the opinion that a fair price can be decided among them
without having tested in the market like in the case of book building.

B. Book Building IPO

The method of offering shares by providing a price range is called book building method. This method
provides an opportunity to the market to discover price for the securities which are on offer. It is a
mechanism where, during the period for which the book for the offer is open, the bids are collected from
investors at various prices, which are within the price band specified by the issuer. The process is directed
towards both the institutional investors as well as the retail investors. The issue price is determined after the
bid closure based on the demand generated in the process.

An issuer company can issue capital through book building in following 2 ways

 75% of the net offer to the public through book building process and 25% at the price determined through
book building. The Fixed Price portion is conducted like a normal public issue after the Book Built portion,
22
 during which the issue price is determined. The option of 75% Book Building is available to all body
corporate that are otherwise eligible to make an issue of capital to the public
 100% of the net offer to the public through book building process

The processes of ‘Fixed Pricing’ and ‘Book Building’ can in the Indian context be equated to the two
policy periods. In the pre-liberalization period it is epitomized by the Controller of Capital Issues (CCI era)
where there was a fixed formula for pricing decided by the CCI. In the post liberalization period the price
discovery process was largely governed by ‘Book Building’ method.

Under CCI regime the market used to allocate new shares on the basis of a fixed price. If price is high, there
would be excess supply. This would result in downward pressure on price, such that equilibrium quantity is
established. Conversely, if price is low there would be excess demand and there would be an upward
pressure on price, so that once again equilibrium quantity is established. CCI used to fix the price adhocly.
Therefore, it did not allow market forces to operate. This leads to misallocation of capital

Book Building vs. Fixed Price Method:

The main difference between the book building method and the fixed price method is that in the former, the
issue price to not decided initially. The investors have to bid for the shares within the price range given. The
issue price is fixed on the basis of demand and supply of the shares.

On the other hand, in the fixed price method, the price is decided right at the start. Investors cannot choose
the price. They have to buy the shares at the price decided by the company. In the book building method, the
demand is known every day during the offer period, but in fixed price method, the demand is known only
after the issue closes.

Manner of Price Fixing

All the applications received till the last dates are analysed and a final offer price, known as the cutoff price
is arrived at. The final price is the equilibrium price or the highest price at which all the shares on offer can
be sold smoothly. If the price quoted by an investor is less than the final price, he will not get allotment.

If price quoted by an investor is higher than the final price, the amount in excess of the final price is
refunded if he gets allotment. If the allotment is not made, full money is refunded within 15 days after the
final allotment is made. If the investor does not get money or allotment in a month’s time, he can demand
interest at 15 per cent per annum on the money due.

23
Valuation under IPOs

It is very important to know how the IPO listing price is determined. Stock share price typically depends on
the tangible value of the underlying assets. By using the balance-sheet information attached to the
prospectus, you can calculate more or less accurate share value to determine whether the IPO shares are
priced correctly or not.

Often it has been observed that fixed price issue undervalued the company’s shares at IPO listing, and is
lower than the estimated market value. As a result, these stocks sell like hot cakes and later investors
positively revalue the company in the secondary market.

Book building process is comparatively more efficient. It matches the demand and supply of the shares to fix
the stock price. There has no chance of price leaks, unlike the fixed price issue. As the price is determined
after the IPO closure, it turns out to be mutually beneficial for everyone. Investors get a potentially positive
upside and the company receives a justified amount of capital.

Factors that influence the pre-IPO valuation:

 The quality of stocks currently being sold in an IPO

 The organizational or management set-up of the private company
 The current market prices of the stocks of similar companies in the same sector
 Company’s future growth potential
 Financial effectiveness of Company’s business model
 The demand from the potential customers for company’s shares
 General overall market trend
 Sometimes, any positive news like the company’s recent achievements, success story, or products
they offer may also affect pricing.

Absolute valuation Method:

Absolute valuation method is the process to estimate the company’s basic value by analyzing the company’s
fundamentals according to the market value. Below list the two most popular techniques used to calculate
the IPO price. Discounted cash flow:
It is the net present value (NPV) of the anticipated cash flows from an investment as at today or at any given
time. The gross revenue streams are figured out by using a series of assumptions about the future business
performance and then forecasting how much this business performance can generate revenue. Economic
value:

24
The value is calculated mathematically by accounting the economic factors like company’s residual income,
assets, risk bearing potential, and outstanding debts.
A simplified formula is: Value of equity = (Enterprise value + Value of cash and investments) - Value of
debt and other liabilities

Relative Valuation Method:

Relative Valuation Method determines the share price by comparing the financial health of the company in
question to similar companies within the same sector. That is why this method is also known as comparable
valuation. The two most popular techniques used in relative evaluation methods are as follows:

Price-to-Earnings Multiple:

It is one of the most common evaluation method used to determine share price, also known as P/E Ratio.
This compares a company’s market capital to its annual income. To compute the value of the company, its
estimated equity value is divided by its recent year's net income. This technique is used when the company
has positive cash flows and when other companies operating in the same industry have similar growth and
capital structure.

Value to EBITDA Multiple:

This method measures the total value of business operations (enterprise value), instead of measuring the
value of the equity. When the enterprise value is estimated, only the operational value of the business is
considered. So, it accounts for the capital value and the cash & security holdings. The investments in bonds,
treasury bills, or any investment in stocks of other companies, are excluded. If you are evaluating any
company which has huge outstanding debts, it will show negative earnings but will have a positive EBITDA
value

25
IPO RATING

As per The Securities and Exchange Board of India (SEBI), “IPO grading is the grade assigned by a Credit
Rating Agency (CRAs) registered with SEBI, to the initial public offering (IPO) of equity shares or any
other security which may be converted into or exchanged with equity shares at a later date. The grade
represents a relative assessment of the fundamentals of that issue in relation to the other listed equity
securities in India. Such grading is generally assigned on a five point scale with a higher score indicating
stronger fundamentals and vice versa as below”.

IPO Grade Indication

1/5 Poor fundamentals

2/5 Below Average fundamentals

3/5 Average fundamentals

4/5 Above Average fundamentals

5/5 Strong fundamentals

IPO grading has been introduced as an objective to make additional information available for the investors in
order to supplement their assessment of fundamentals of the company offering equity issues through an IPO.
SEBI had made it mandatory to grade all IPOs commencing from May 2007. Post this announcement many
credit rating agencies such as ICRA, CARE and CRISIL registered with SEBI to provide IPO grading
services. However, IPO grading was not well received by many. With effect from 4 th February 2014, on the
request of Investor Associations and Association of Investment Bankers of India (AIBI) and the mounting
corporate steer, SEBI had come up with a new guideline that made IPO grading optional.

If the issuers has opted for a grading their IPO, the Prospectus/Red Herring Prospectus, as the case may be,
shall contain the grade received from the agencies. Along with this, description of the grades should be made
available in issue advertisement or any other place where the issuer company is making advertisement for its
issue

26
Changing landscapes of Indian IPO scenario

In a way, the IPO boom began in 1977 when Reliance Industries came out with its IPO. Later in the late
1970s, many of the MNCs had to come out with IPOs to continue being listed in India and that means they
had to come out with IPOs at very attractive valuations. This was, in fact, the big event that changed the face
of IPO. But the IPO process remained largely the same till the advent of compulsory demat allocation less
than 20 years back. Back in the 1990s, the IPO process was quite elaborate and time consuming. You would
apply for an IPO by cheque and you would get to know only after a couple of months if the shares were
allotted or not. Shares would be sent to you as physical certificates which you could either sell on listing or
you would have to get your name as the owner of shares on the certificates. In case of refund orders there
was a wait of another month. Comparatively, the IPO landscape has changed drastically in the last 20 years.
Here is how.

Demat allotment of shares and rapid banking

This was perhaps the biggest shift in the IPO landscape. With direct credit of IPOs into your demat account
and quick payment processing through online banking, it became possible to reach out to a larger mass of
investors with a more attractive proposition. Demat allotment meant that the entire process could be
completed within 15 days and the refund orders were credited into your bank accounts by electronic fund
transfer. This time to allotment has now been reduced to 3 days with the SEBI permitting payment via UPI
too which does not require banking interface in the same way as NEFT or IMPs requires. Also, one can
apply for an IPO just with a demat account and you require a trading account only when you need to sell the
shares.

Compressing the time to allotment

The compression of time to allotment has much larger implications. In the past, when you would apply for
an IPO by cheque, your funds would get debited and stay locked for as long as 3 months. This is assuming
that there were no problems in the allotment process or in the refund process. The wait was almost
interminable and you really had no clue what was happening. Things did improve when allotment status was
offered online; something that has become a norm today. Today the entire IPO process via book building
takes less than a week to complete and effectively January it will be further reduced to 3 days. When funds
are locked for shorter periods, you are able to earn productively on your funds and also use the funds more
often.

Greater scrutiny of IPOs

27
One of the big challenges that IPOs faced in the 1990s and 2000s was the large number of fly-by-night
promoters would collect public money and vanish. They were referred to as Vanishing Promoters. Back then
it was possible for promoters to vanish with leaving any audit trail and start afresh from elsewhere. A lot has
changed in the last 2 decades. SEBI has put a lot more onus on the investment bankers to do the vetting with
greater depth. The market has also its own mechanism to week out the fly by night promoters. But above all,
the combination of digitization of MCA records, demat accounts, banking and the multiple choke points of
Aadhar and PAN have ensured that there is no incentive for promotes to act with a short term perspective.
The costs of default have become too high now. That has ensured greater scrutiny.

Book building and anchor investors

From having compulsory IPO issues at Rs.10 to using an outdate PECV formula of the Controller of Capital
Issues (CCI), Indian IPOs have come a long way. Two major changes happened along the way. From the late
1990s, most promoters and investors saw the merits of book building and today the IPO market has become
a book built market. In book building the price is discovered through the process of book building based on
demand and the company only specifies the range. Another major shift has been the introduction of anchor
investors. This has largely institutionalization of the new issues market and offers greater confidence to retail
investors.

In a nutshell, the IPO landscape of today is vastly different from what it was even about a decade ago. And
the change has been for the better.

Factors to be considered before applying for an IPO:

There are certain factors which need to be taken into consideration before applying for Initial Public
Offerings in India:

The historical record of the firm providing the Initial Public Offerings

Promoters, their reliability, and past records

Products offered by the firm and their potential going forward

Whether the firm has entered into collaboration with the technological firm

Project value and various techniques of sponsoring the plan

Productivity estimates of the project

Risk aspects engaged in the execution of the plan

The process to buy shares

28
Eligibility to invest in an IPO

Technically speaking, any adult who is competent to enter into a legal contract is eligible to apply in the IPO
of a company. Of course, it is essential that you have a PAN card issued by the Income Tax department and
you also have a valid demat account. Remember, having a trading account is not necessary in case of IPOs, a
demat account alone is sufficient. However, if you want to sell the shares on listing then trading account will
be required. That is why brokers will advise you to open a trading account along with demat account when
you apply for an IPO for the first time. An important point to be remembered here! When you apply for an
IPO, it is not an offer but an invitation to offer. Only when the IPO issuer offers you shares, it amounts to an
offer.

How to apply for an IPO

There are two important questions you need to address here: How to apply for IPO online and the IPO
application process. Here is what you need to know when you apply for an IPO of a company

IPOs come in two varieties viz. Fixed Price IPOs and Book Built IPOs. In a fixed price IPO, the company
fixes the IPO price in advance as the sum of the par value and the premium. You can only apply for the IPO
at that price. In a Book Built issue, the company will only provide an indicative price range for the IPO and
the final price of the IPO will be discovered through the book building process. Nowadays, most of the IPOs
are predominantly through the book building route only.

IPOs have three classes viz. Retail, HNI and Institutional categories. Investments up to Rs.2 lakhs in an IPO
are classified as retail investors. It is beneficial to invest in the retail quota because the allotment
methodology is designed by SEBI to ensure that as many retail investors as possible get allotment. Thus,
your chances of allotment are much higher in this case. In case of HNIs the allotment is proportionate while
in case of institutions the allotment is discretionary.

You can bid for IPOs through the offline method or through the online method. In the offline method, the
form is filled up in physical form and submitted to the IPO banker or to your broker. In an online application
you can log in the application directly through the trading interface provided by your broker. The advantage
in the online IPO is that most of your data is automatically populated from your trading / demat account thus
reducing the clerical effort from your side. That largely simplifies the online IPO application form fill-up
process. In fact, IPO online application is the preferred mode.

Under the book built method, the basis of allotment is finalized within 10-12 days and the demat credit also
happens within a couple of days after that. Once the shares are in your demat account and the stock is listed

29
on the exchanges, you are free to sell the shares. As stated earlier, you need a trading account to sell these
shares.

There is a very important aspect you need to understand about applying for IPOs. SEBI has now made
available a facility called the ASBA (Applications Supported by Blocked Amounts). The advantage of an
ASBA IPO is that you do not have to issue a cheque or pay any money for the IPO till the allotment is made.
The amount to the extent of your application is blocked from your bank account and on the allotment day,
the amount will be debited only to the extent of the shares allotted. That means if you applied for shares
worth Rs.1.50 lakhs and you got allotment for only Rs.60,000, then only Rs.60,000 gets debited to your
account and the block on the remaining amount is removed from your designated bank account.

The IPO application process has become substantially simpler in the last 10-15 years. In the process it has
substantially empowered the retail investors across India.

IPO INVESTMENT STRATEGY

In this digital age, there are numerous companies which jump into the sea of stock market with an intention
of making a big name and end up with fate which leaves no trace of their existence. People may experience
huge first day gains, or huge long term gains. Some may get disheartened with their first IPO prices going
red the very first day or when it takes a downhill path in the long term. What you can make out of these
situations are that there is no sure shot way to gain money in the stock market. They are way too volatile!

Finding a good IPO is difficult, but certainly not impossible. A good IPO investment has certain traits. If you
can get most of it right in the IPO you are planning to invest, then your chance of getting lucky is more.

1. Subscription of IPO by QIB

If you are thinking to do a detailed research and to read every detail in the prospectus, to browse through the
articles from the third party websites, or from the investment banks – then STOP right now!

To do a research yourself, you may not have the way in to all the organizational information which would
help you decide. The 3rd party websites may have been compromised to give biased views and the
investment banks and brokers will have their own vested interests to portray the company they support in a
good light. So, the rule is, if the QIB category is over subscribed, then you can trust that IPO, because the
Institutions have better access to the Company data than the retail individual investor. And you can be sure
that the institutions will not put in their money where it won’t grow.

2. Use of proceeds

30
Read the prospectus in which they will state on how they will make use of such a huge capital they raise by
going public. The plan of action which may include coming up with new products, spreading their wings to a
different sector, bettering their infrastructure, or just clearing off the debts, any of these or a combination
should have a potential to generate good revenue. If the prospects look promising, the chance of buying
looks bright.

3. Invest at cut-off price

If you are a retail individual investor and you are keen on increasing the chance of getting shares allotted
then bid at the cut-off price. That way your application will be considered, whatever maybe the final
allotment price.

4. Evaluate the company’s prospects

The timing of the company’s entrance into the market, and the success of the competitors in the same sector
and their drive to make the most out of the market share should be evaluated before you invest in an IPO.
The company’s history as a private business, their growth path and the fundamentals they believe in.. every
matter has to be considered when you start considering to put money in an IPO

5. Fill out the form with every detail

When you are filling out an application form, fill in every detail they have asked for. Incomplete forms may
get rejected. And if you miss out filling out an ECS refund, you may be cut out from the facility of easily
getting the refund into your bank account.

6. Select a good broker

The most-sought after IPOs are quite hard to get. There are brokers or IPO portals that can open the door to
new and interesting IPO stocks. They may have enough connections to ensure decent allocation for you.

7. Look at the valuation

Valuation is toughest to conclude for retail investors. This process is extremely technical. The investment
bankers and under-writers judge the quality of management and returns before arriving at the final offer
price. Compare the valuation of the IPO in India in the secondary market with a listed peer.

31
 CHAPTER 2. RESEARCH METHODOLOGY
This section sketches the research design, data collection method, the sampling procedure, the variables
used, hypothesis tested.

Rational of The study

IPOs refer to the initial sale of shares by a company to the public investors with the purpose to raise finance
for the corporation. After the issue they are listed on the stock exchange for further trading of the company’s
security in the secondary market. The IPOs are heavily regulated by a number of regulatory bodies, such as
SEBI, Stock Exchanges (Listing agreement), FEMA guidelines (RBI), and Companies Act, 2013. The
advancement in information technology is a major contributor of growth in Primary market.

A large number of oversubscribed IPOs indicate the confidence of the investors in the market. Also the IPO
scam of individual investors placing multiple bids in IPO auctions is the evidence of the craze of investors
for the primary market.

The concept of IPO grading by a credit rating agency is supposed to enhance the investor’s confidence in
the primary market. The primary market is not only provides the opportunity for investors to earn good
returns but also becomes a preferred route for a lot of companies. The purpose is not only to raise funds for
the company but also to acquire and enhance the public image and to get exposed to the global market as
global presence, global brands and global markets is the success mantra for the success of the company.

The most important phenomenon in the primary market is the concept of valuation of IPOs. The true
valuation is necessary for the trust, faith and confidence of the investors in the primary market. There is a
need to study the past performance of IPOs and about the various factors which may affect the returns in the
secondary market.

The economy as a whole will grow in true sense if the business matures and when the wealth created by
entrepreneurs is shared with the investors. Hence a detailed and microscopic analysis of primary market in
Indian stock market is desired.

Objectives of the study

To study the process of IPO in India in depth, and various terms related to it

To understand the pricing of IPO – fixed and book building

To study about the IPO growth in India

To know the various regulatory bodies governing the process of IPO in India

32
Research Design

For the purpose of our study, both primary and secondary data were utilized. Annual Reports, Prospectus,
etc. of the sample companies were verified. Also, numerous articles available in journals, websites,
newspapers and e-papers were considered. Some of the books, which are available in the market, were also
consulted while carrying out the research work. The websites of the companies and the regulatory authorities
were very good source of relevant information. In addition to this, information from available research work
was taken.

SAMPLING

Primary data

The primary data is collected using survey method, by circulation unbiased questionnaire. The area of survey
was Mumbai, Thane and south Mumbai. In the survey period of a day 32 responses were collected.

Secondary data

This study is based on the data of 258 Initial Public Offerings (IPOs) which were offered between Jan 2010
and Dec 2019 and got listed on National Stock Exchange. The data is secondary in nature. The data of these
253 IPOs is collected from the official website of National stock exchange ([Link]). The
website of [Link] (Indian IPO investment portal) is used to get details of IPOs.

Description of the Variables

The research study includes the following variables:

1. Issue price : The price at which a company’s shares are offered to the market for the first time, which
might be at par or at a premium or discount. In case of Book building issue, the issue price is decided by the
registrar after receiving all the applications for the shares. When they begin to be traded, the market price
may be above or below the issue price.

2. List price: After closing of the issue the IPO lists on the stock exchange. The Market price after the listing
on the stock exchange is known as the list price of the issue. The list price reflects the market expectations
associated with the company performance in the future.

3. Subscription: An IPO subscription is an offer to a buyer to purchase soon-to-be issued stocks. The
subscription is expressed in terms to the times, by which the issue is subscribed. The subscription represents
the demand of the IPO among the investors in the market.

4. Issue Size: Issue size is the amount which a company wants to raise by offering equity shares to the
public.

33
6. Listing Day Return: This is the return earned by the investor by selling the allotted shares on the listing
day.

7. IPO Grading: IPO Grading is provided by SEBI approved rating agencies including CRISIL, CARE and
ICRA. IPO Grading is designed to provide investors an independent, reliable and consistent assessment of
the fundamentals of IPO Issuer Companies. As IPO Grading is decided much earlier than the issue price or
issue dates are finalize (usually on the IPO filing) and they just tell about the fundamentals of the company.

34
 CHAPTER 3. REVIEW OF LITERATURE

This chapter includes the review of the research work related with the study done in the past, the objectives
of the research study and the methodology adopted to analyse the data.

In India, IPOs seems to be low-hanging fruits for the investors. If investors were to get allocations in IPOs
and sell these shares on the listing day, then on an average they would be able to get returns higher than the
market. However the risk of blocking one’s money in IPOs and getting no allocations is associated with
investments in IPOs. The behaviour and the determinants of IPO returns on the listing day as well as in long
term period has been researched extensively in almost all the major stock exchanges of the world. Here the
literature reviews of the previous researches done on the returns behaviour of IPOs all over the world
including Indian stock market are mentioned below:

Ritter (1984) analysed the “hot issue” market of 1980, the 15-month period starting from January 1980 and
extending through March 1981 during which the average initial return on unseasoned new issues of common
stock was 48.4 per cent. This average initial return compares with an average of 16.3 per cent during the
“cold issue” market comprising the rest of the 1977-82 periods. An equilibrium explanation for this
difference in average initial returns is investigated but is found to be insufficient. Instead, this hot issue
market is found to be associated almost exclusively with natural resource issue. For firms in another
industry, a hot issue market is barely perceptible. This research paper documented tremendous disparities
between the initial returns from natural resource issues vis-à-vis non natural resource issues in the United
States during 1977–82, underlining the role of industry classification in IPO underpricing.

Ritter (1991) found that the underpricing of initial public offerings (IPOs) that have been widely
documented appeared to be a short-run phenomenon. Issuing firms during 1975-84 substantially
underperformed a sample of matching firms from the closing price on the first day of public trading to their
three-year anniversaries. There was a substantial variation in the underperformance year-to-year and across
industries, with companies that went public in high-volume years faring the worst. The patterns were
consistent with an IPO market in which (1) investors are periodically overoptimistic about the earning
potential of young growth companies, and (2) firms take advantage of these "windows of opportunity."

Reena Aggarwal et al. (1993) found the initial one-day returns to be 78.5 per cent, 16.7 per cent, and 2.8
per cent for Brazil, Chile, and Mexico. The long-run mean market-adjusted returns were found to be -47.0
per cent in Brazil after three years. The three-year mean excess return was -23.7 per cent for Chile and the
one-year mean excess return was -19.6 per cent for Mexico. They indicated long-run underperformance. For
Brazil, there seems to be a negative relationship between the initial returns and the long-run returns,
suggesting the overpricing of IPOs on the first trading day. These findings for the Latin American markets
were similar to the U.S. and UK pattern of long-run underperformance. Based on the international evidence,

35
it appears that these long-run patterns were not just sample or country-specific. This phenomenon, in fact,
existed in nearly all markets except the U.S. and UK

Kasim Alli et al. (1994) analysed the underpricing of IPOs of financial institutions and found that in
general, IPOs of financial institutions are significantly less underpriced than those of non-financial
institutions. These results are consistent with previous empirical studies on the testing of information
asymmetry hypothesis that the less ex ante uncertainty about the value of the new issues, the smaller the
average underpricing. These results hold even after controlling for differences in underwriters' reputation,
aftermarket volatility, and years since establishment. However, results also show that the difference in the
underpricing between S&L conversion and nonfinancial firm IPOs disappears once the differences in
underwriters' reputation, aftermarket volatility, and years since establishment have been controlled for. This
suggested that the difference in the underpricing between the non-financial institutions and the financial
institutions was primarily due to the underpricing of the non-S&L conversion IPOs. Furthermore, results
generally indicated that the level of ex ante uncertainty was lower for financial institutions than for non-
financial firms. Judging by the size of the average underpricing of the non-S&L conversion financial
institution sample (3.84 per cent), the ex-ante uncertainty associated with the financial institutions
(represented by the non-S&L conversions) seemed to be bigger than those of equity carve-outs (1.7 per cent)
or leveraged buyouts (2.04 per cent). The results from this study were more consistent with the information
asymmetry hypothesis than the insurance-against-legal-liability hypothesis. The lower level of underpricing
for non-S&L conversion financial institutions was also consistent with the regulation hypothesis that the
regulations imposed on depository financial institutions helped reduce ex ante uncertainty.

Narsinhan and Raman (1995) analysed the performance of 103 IPOs and found that the initial returns from
the IPOs are higher.

Ritter and Loughran (1995) found that the companies issuing stock during 1970 to 1990 whether an initial
public offering or a seasoned equity offering, have been poor long-run investments for investor. During the
five year after the issue, investors had received average returns of only 5 per cent per year for companies
going public and only 7 per cent per year for companies conducting a seasoned equity offer. Book-to market
effects accounted for only a modest portion of the low returns. An investor would have had to invest 44 per
cent more money in the issuers than in non-issuers in the same size to have the same wealth five years after
the offering date. The research paper documented that larger and more established IPOs had given better
returns to their investors over the long run compared to their smaller and younger counterparts. These
arguments highlighted investor uncertainty as a prime factor in IPO underpricing.

Douglas A Hensler et al (1997) estimated an accelerated failure time (AFT) model to investigate the effects
of several characteristics suggested as indicators of firm survival for initial public offerings (IPOs). The
results indicated that the survival time for IPOs increases with size, age of the firm at the offering, the initial

36
return, IPO activity level in the market, and the percentage of insider ownership, while the survival time
decreases with increases in the general market level at the time of offering and the number of risk
characteristics. Additionally, the survival time is negatively affected if the IPO is in the computer and data,
wholesale, restaurant, or airline industries and positively if the IPO is in the optical or drug industries.

Raghuram Rajan and Henri Servaes (1997) examined data on analyst following for a sample of initial
public offerings completed between 1975 and 1987. They did this to observe three well-documented IPO
anomalies. They found that higher underpricing leads to increased analyst following. Analysts are
overoptimistic about the earnings potential and long term growth prospects of recent IPOs. More firms
complete IPOs when analysts are particularly optimistic about the growth prospects of recent IPOs. In the
long run, IPOs have better stock performance when analysts ascribe low growth potential rather than high
growth potential. These results suggested that the anomalies may be partially driven by over optimism.

Lawrence M Benveniste and Walid Y Busava (1997) compared two mechanisms for selling IPOs, the
fixed price method and American Book Building. They found that the book building generated higher
expected proceeds but exposed the issuer to greater uncertainty, and that it provided the option to sell
additional shares that were not underpriced on the margin.

Barnal and Obadullah (1998) analysed the 433 IPOs and also found the initial returns to be higher.

Pandey and Arun Kumar (2001) explored the impact of signal on underpricing. Based on cross sectional
data of 1243 IPOs in Indian Market during 1993-1995, they found that realized excess initial returns on IPOs
were high on approx. 68 per cent. They also reported that smaller sized issues tend to have higher initial
returns as compared to large issues.

Krishamurti and Kumar (2002) described the environment for making initial public offerings (IPOs) in
India and the process itself; and discussed the applicability of various research explanations for underpricing
to the Indian Market. It suggested that it will be greater for new firms and issues managed by reputable
merchant bankers. The research paper analysed 1992-1994 data on 386 IPOs to assess their performance and
found that the issues with high risk and/or smaller offer prices are more underpriced; and that returns are
strongly correlated with subscription levels.

Ritter and Welch (2002) focused on three areas of research on IPOs. These were (1) reasons for going
public, (2) the pricing and allocation of shares, and (3) long-run performance and found that that market
conditions are the most important factor in the decision to go public. The stage of the firm in its life cycle
seemed to be the second important factor. The theories based on asymmetric information were unlikely to
explain average first-day returns of 65 per cent. Underwriters did not bundle multiple offerings together,
which would have lowered the average uncertainty and the need for underpricing in the context of
information models.

37
Ritter (2003) cited behavioral finance to explain severe under-pricing of IPOs, noting that if an IPO were
underpriced, pre issue stockholders were worse off because their wealth had been diluted. The entrepreneur,
on the other hand, received the good news that he or she was suddenly and unexpectedly wealthy because of
a higher than expected IPO price. Integrating the wealth increase and dilution, the issuer could be better off
on balance. Underwriters take advantage of this mental accounting and severely underpriced many IPO
deals.

Jaitley (2004) studied the extent of under pricing shortly following the deregulation of new issue market and
found that first day return was on an average 72 per cent. This study investigated the pricing of new issues in
the Indian equity market during the period shortly following the deregulation of the market for new issues
and evaluated the importance of book value and market value estimates in determining issue prices as well
as prices on the first day of trading. The study also used variables that may reduce uncertainty (age to proxy
for awareness of the company) and information asymmetry (the extent of the promoter’s contribution to the
new issue) in order to test whether uncertainty and information asymmetry have an impact on pricing of new
issues. The result indicated that pricing of new issues appears to be consistent with rational decision-making.
No significant differences were found in first day returns between the two groups of companies. There were,
however, significant differences between the two groups with respect to relative size of the issue and the
difference between the forecasted and current book value. This indicated that the CCI price might be used as
a benchmark, which is, then adjusted upwards or downwards to place greater emphasis on expected
performance.

Onur Arugaslan et. al. (2004) examined the arguments for “why monitoring considerations create
incentives for managers to under price their firms’ IPOs” using a sample of U.S. IPOs. They found that the
determinants of initial returns, institutional shareholdings, and post-IPO likelihood of acquisition were not
consistent with these arguments. They concluded that monitoring considerations are not important
determinants of IPO underpricing.

Francois Derrien (2005) explored the impact of investor sentiment on IPO pricing. Using a model in which
the aftermarket price of IPO shares depends on the information about the intrinsic value of the company and
investor sentiment, it was found that the IPOs can be overpriced and still exhibit positive initial return. A
sample of French offerings with a fraction of the shares reserved for individual investors supported the
predictions of the model. Individual investors’ demand was found to be positively related with market
conditions. Moreover, large individual investors’ demand leads to high IPO prices, large initial returns, and
poor long-run performance.

Mohammed Omran (2005) noticed the underpricing for 53 share issue in Egypt between 1994 and 1998.
Over several intervals (up to five years), share issue privatizations sustain the ir positive performance and
provide investors with positive abnormal returns over a one-year period; however negative abnormal returns

38
were noticed over three- and five-year horizons. The initial excess returns were determined by ex-ante
uncertainty and oversubscription, whereas the aftermarket abnormal returns over a one-year period are
driven by ex-ante uncertainty and the price-earnings ratio. However over three and five-year periods,
abnormal returns are significantly affected by initial excess returns, the price-earnings ratio, and, to a lesser
extent, oversubscription. These empirical findings were consistent with IPO markets in which investors are
overoptimistic about the performance of these issues but grow more pessimistic over time.

Marisetty and Subrahmanyam (2005) documented the effect of group affiliation on the 2713 IPOs made
in India during three regulatory regimes during the period 1990- 2004. The study found that, the average
under pricing of group companies was higher than that of standalone companies. In particular, they reported
that under pricing was higher for companies affiliated to private foreign (multinational) and private Indian
groups.

Pandey (2005) examined the difference in under pricing of IPOs caused by difference in allocation
mechanism. On a sample of 84 Indian IPOs (20 book-build and 64 fixed price from the period 1999-2000, he
found the initial returns were higher on fixed offer pricing. It may be noted that fixed price method was used
for allocating of IPOs until 1999 when book building was allowed. Now both book building and fixed offer
price method are available. This provides opportunity to compare both mechanisms under similar market
conditions.

Ghosh (2005) carried out a study to find out the factors explaining IPO under pricing using 1842 companies
that got listed on Bombay Stock Exchange from 1993-2001. His study supported the signalling theory.
Contrary to the international experience, he reported that under pricing was less during the high volume (hot)
period as compared to the slump period in the Indian stock market.

Ravi Lonkani and Michael Firth (2005) studied IPO prospectus in Thailand and found that this type of
direct disclosure is especially important in a developing economy such as Thailand where financial
intermediaries and information vendors are relatively sparse, and where investors are rarely professionals. It
was also found that the managers' earnings forecasts were much more accurate than extrapolations of
historical earnings. The forecast accuracy is related to underpricing, and it has a directional, but not
statistical, association with one-year stock returns and one-year wealth relatives.

Ya-Fang Wang et al (2005) examined whether a regulation on mandatory disclosure of financial forecasts
since June 1991 and further sanction imposition since March 1998 contribute to lower IPO firms’ initial and
aftermarket returns, and shorten honeymoon periods. The study was based on 423 IPO firms after the
regulation required them to disclose their forecasts and 53 IPO firms prior to the regulation. The findings
reported that initial and aftermarket returns are lower, and honeymoon periods are shorter in the post-
regulation period than those in the pre-regulation. The findings also reported that initial and aftermarket
returns are relatively smaller, and the honeymoon periods are shorter after the March 1998 regulatory
39
sanction was imposed after controlling other variables. These results documented that the financial forecasts
disclosure regulation evidently contributes to mitigating information asymmetry.

Ansari V. Ahmed (2006) studied the IPO underpricing in India during the period of 2005 and found that the
average first-day return (underpricing) was 40.9 per cent which is quite substantial. He also found that
during the period 84 per cent of the IPOs were underpriced and 16 per cent were overpriced.

Steven D. Dolvin and Mark K. Pyles (2007) conducted an empirical analysis on IPO data collected over
the period 1986-2000. Specifically, they examined potential pricing differences between IPO that went
public during the fall and winter months, relative to other issues. It was found that IPOs experience higher
levels of underpricing in both the fall and winter months and that offer price revisions are higher during the
winter months. Both of these results are consistent with seasonal affective disorder (SAD) influencing the
IPO pricing process. The results suggested that behavioral issues (i.e. the emotions of buyers) may had as
much of an effect on the pricing of IPOs as more traditional characteristics. Further, the results implied that
firms with flexible issuance schedules should avoid going public during months affected by SAD, thereby
potentially reducing the cost of issuance.

Guntur Anjana Raju and Rudresh R. Kunde (2009) found that a public company issuing IPOs have seen
dramatic listing gains on their first day of trading. Of the 110 IPOs floated between January 2006 and April
2007, 104 recorded listing gains. In 70 of them, the listing day gain exceeded 20 per cent of the issue price.
IPOs had given good returns for the short term as well as the long term and could be considered to be a good
investment avenue for wealth creation. In the year 2007, as well, taking advantage of the strength in the
secondary market, many high profile companies lined up to raise money from the market. The average
returns provided on listing during the period January 2005 to March 31, 2007, was 33 per cent, with these
returns being realized immediately, within approximately 40 days of the issue being floated. These attractive
returns coupled with the short returns realization period are making IPOs a rewarding investment option.

Soumya Guha Deb (2009) examined the underpricing in Indian IPOs during the period from 2001 to 2009.
Using a sample of 187 IPOs, the results indicated evidence of underpricing on the average in Indian IPOs
during this period. It is also observed that the mispricing adjusts very quickly and no excess returns are
available to investors in the aftermarket in the short run which is consistent with the notion of efficient
market hypothesis. A strong positive relationship was found between underpricing and ex-ante as well as ex-
post measures of uncertainty. The level of activity in the issues measured by the daily trading volume is also
found to have strong correlation with underpricing.

Alok Pande and R Vaidyanathan (2009) looked at the pricing of IPOs in the NSE, in particular, it sought
to empirically explain the first day underpricing in terms of the demand generated during the book building
of an 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 the IPOs by the firms. It also sought to understand any emerging
40
pattern in Indian IPO market with reference to the previous studies. Moreover, it sought to find the Post-IPO
returns for one month in the NSE. The results suggests that the demand generated for an issue during book
building and the listing delay positively impact the first day underpricing, whereas the effect of money spent
on the marketing of the IPO is insignificant. It was also found that in consonance with the extant literature,
the Post-IPO performance in one month after the listing for the firms under study is negative.

Seshadev Sahoo and Prabina Rajib (2010) evaluated the price performance of IPOs with respect to short-
run underpricing and long-run underperformance for 92 Indian IPOs issued during the period 2002-2006 up
to a period of 36 months including the listing day. The result indicated that on an average the Indian IPOs
are underpriced to the tune of 46.55 per cent on the listing day (listing day return vis-à-vis issue price)
compared to the market index. The long-run performance of IPOs up to a period of 36 months measured by
using the two most promising evaluation techniques, i.e., wealth relative (WR) and buy-and-hold abnormal
rate of return (BHAR), both being adjusted with market index, CNX-Nifty. Further, it was found that the
underperformance is most pronounced during the initial year of trading, i.e., up to 12 months from the listing
date followed by over–performance. To get possible explanations for long-run underperformance for Indian
IPOs, factors like underpricing rate (listing day return), offer size, leverage at IPO date, ex-ante uncertainty,
timing of issue, age of IPO firm, rate of subscription, promoter groups retention, and price-to-book value (as
proxy for growth) were considered. Evidence found, that initial day return, offer size, leverage at IPO date,
ex-ante uncertainty, and timing of issue are statistically significant in influencing underperformance.
However, there was no evidence favorable to the age of the IPO firm, rate of subscription, promoter group’s
retention, and price-to-book value impact on the long-run underperformance. The empirical results suggest
that the investors who invest in IPOs through direct subscription earn a positive market adjusted return
throughout the period of study. But investors who bought shares on the IPO listing day earned negative
returns up to 12 months from the listing date and expect to earn positive market-adjusted return thereafter.

41
 CHAPTER 4. DATA ANALYSIS ,PRESENTATION AND INTERPRETATION

Your age
0-25 26-30 31- 50

9%

21%

70%

INTERPRETATION

From above it can be seen that 70 per cent of the respondents belong to age group of 0-25 which indicates
that max. responses are provided by youth, Further followed by 25- 30 age group. There are no responses of
people above the age of 50 years

42
 Your Gender ?
Total

Male 15

Female 18

13.5 14 14.5 15 15.5 16 16.5 17 17.5 18 18.5

Interpretation

The above graph indicates the responses given by female respondents and male respondents. The percentage
of female respondents is more than those provided by male respondents. Out of 33 respondents 15 are male
and 18 are female.

43
 You are?
Total
25

20

15

10

0
student businessman professional employee other

Interpretation

The above bar graph shows the occupation of the candidates responded. The responses given by students is
maximum, followed by businessman, employees and so on.

44
Interpretation

The results of incomes of respondents shows that there are very few people falling in category of 5 to 7 lakh
income slab whereas there are no respondents whose income is more than 7 lakhs

45
Interpretation

Almost 27.5 per cent of respondents invest their savings in fixed deposits account. The no of candidates
investing theirs savings in primary and secondary market is almost half of investment in FDs. this maybe
due to the risk factors involved or due to lack of knowledge about capital markets. Also the investment in
gold is preferred over capital market.

46
 Are you aware of initial public offerings IPO ?
maybe No Yes

3%

24%

73%

Interpretation

Its shows that 24 percent of the candidates have no knowledge of the initial public offerings which is almost
one fourth the candidates surveyed. This maybe due to lack of awareness about IPO, also as maximum
respondents are still from student category. There should more advertisement of IPO, what are its benefits to
investors.

47
Interpretation

The above pie chart shows the percentage of candidates who had earlier invested in IPO. Only 15.2 percent
candidates have invested in IPOs earlier

48
Interpretation

From above it can be said that there are future growth perspectives for IPO markets. Out of 30 candidates, 22
candidates are interested in investing their money in IPO.

49
Interpretation

The maximum responses are received for long term return i.e. 48.5 percent. This shows that people
investing in IPO holds the securities for longer duration. The people investing in IPO for listing gains are
comparatively less.

50
Interpretation

From above it can be seen that one of the most important factor affecting selection of IPO for investment is
the existing performance of the business going for IPO, Followed by Sector performance and promoters of
the company going for IPO. One of the major reason why to check performance of the company is to ensure
the recoverability of investment.

51
Interpretation

This question was asked

from investors to know
that whether difficulties
faced

52
by investors while investing
in IPOs discourage the
investment
This question was asked to know that any difficulties faced by investors while investing in IPOs discourage
the investment. 47.6 percent people have not find any difficulty, followed by 33.3 percent who sometimes
find difficulties.

53
This question was asked
from investors to know
that whether difficulties
faced
by investors while investing
in IPOs discourage the
investment
Interpretation

The problem faced by respondents while applying for IPO is no clarity in allotment, refund is not all a
problem this maybe due to introduction of ASBA account.

How is the procedure of IPO ?

Very easy
5%

Somewhat easy
24%

Neither easy nor difficult

57%

Somewhat difficult
14%

54
Interpretation

Maximum people find the procedure of IPO neither easy nor difficult by 57 percent. 5 percent people
consider process of IPO to be easy followed by 14 percent who thinks it to be somewhat difficult and
remaining considers it to be somewhat easy.

55
Interpretation

According to 44 percent of candidates there will be no change in IPO market in Future. Whereas 36 percent are of
opinion that there will be good growth in IPO market. As of now it can be due to economic policies and speed of the
growth.

How would you rate IPO as an in-

vestment option ?

Poor
4%

Average
23%

Excellent
8%

Good
65%

Interpretation

65 percentage of the candidates rate IPO as good investment option followed by 23 percent who rates IPO
averagely whereas 4 percent considers it to be poor and on the other hand 8 percent people suggests it to be
excellent choice.

56
PERFORMANCE OF INITIAL PUBLIC OFFERINGS (IPOS) IN INDIAN STOCK MARKET

Frequency distribution of Initial Public Offerings

The primary market provides opportunities to the new and small entrepreneurs as well as existing
companies to raise capital from the general public including the individual and institutional investors. The
economy of the country develops as a result of this participation since the wealth generated by the
companies will also be shared by the investors. The strength of the economy is also reflected by the number
of IPOs in the stock market

The table 1 along with fig1 represents the number of initial public offerings (IPOs) that came in the period
Jan 2010 to Dec 2019. The results as shown in the table indicate high level of variations in the frequencies of
IPO’s that came in different years. It can be seen in the table that initially the number of IPOs decreases from
2010 to 2013 minimum being 5 IPOs in the year 2013, from which only 3 issues succeeded. Further the no.
of IPOs rise at relatively lesser rate except in the year 2015 where the rate is higher. From the year 2018
once again no of IPOs decline.

57
 Year No. of IPOs Amount Raised( Rs in Cr) Issue Succeeded Issue Failed

2010 66 36,362.18 64 2

2011 40 5,977.47 37 3

2012 13 6,834.17 11 2

2013 5 1,283.95 3 2

2014 7 1,200.94 5 2

2015 21 13,513.17 21 0

2016 27 26,500.82 26 1

2017 38 75,278.57 38 0

2018 25 31,731.28 24 1

2019 16 12,687.32 16 0

Table 1: Year-wise number of IPO's in India

Source: [Link]

80000

70000

60000

50000

40000

30000

20000

10000

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig 1 : Year wise capital issued by IPO in India.

58
Indian initial public offerings tumbled to a 4-year low by value in 2019 as the economy slowed. In 2017, the
proceeds hit a record Rs. 75,278.57 crores before falling to Rs. 31,731.28 in 2018. 2019 has been the worst
year from an IPO market perspective, Because of different types of disruptions, such as corporate failures
and bankruptcies, things have slowed down considerably.

Financials and industrial sectors led the declines in IPO issues, with proceeds more than halving.

India's NSE Nifty 50 index was down about 1.4 percent for the year on September 19, a day before the
announcement of a cut in the corporate tax rate boosted markets and raised hopes of more reforms to help
the economy.

The NSE index was up 12.4 percent in 2019 as of December 24's close. The government has addressed a lot
of economic reform requirements in the last three months of the year 2019. At the same time, many of this
year's IPOs have performed well, boosting the outlook for more issues next year.

RETURNS ON LISTING DAY

Listing Day Returns

60

50

40

30

20

10

0
less than -10% -10% to 0% 0% to 10% 10% to 20% 20% to 30% 30% to 40% 40% to 50% above 50%

Fig 2: listing day returns

Source: [Link]

59
After an issue is closed, it is listed on the stock exchange and becomes available for the trading in the
secondary market. The list price of IPO on the listing day is decided by the market expectation and the
demand and supply forces in the market. The price on the listing day may be higher, lower or equal to the
issue price. The return on the listing day is one of the important factors to analyze the performance of initial
public offerings in the stock market. Mathematically it can be calculated as (P1-P0)/P0, where P1 is the
opening price on the listing day, P0 is the issue price. Opening price on the listing day is considered for the
study as it represents the initial expectations of the market, the more logical price for the study and makes
calculations easier.

Analyzing the data of all the IPOs issued during the period Jan 2010 up to Dec 2019, it is found that, the
average return provided by the IPOs on the listing day is 12.53 percent which is impressive. The investors
could earn this return just in a time period of around four to five weeks. This result also supports the results
of the earlier research on IPOs that the IPOs are under priced. The main reason of underpricing is the
information asymmetry between the different categories of investors and the behavior of the companies
issuing the IPOs. Most of the companies come out with IPOs in bullish scenarios especially when the market
is moving up. At this time it becomes easier for the companies to raise funds from the market. Also the
prices decided by the companies are on higher side as the stocks of other companies are available in the
market at higher prices. Hence the positive sentiments in the market help the companies to keep the prices of
the issue on higher side. The investors, who are unsuccessful in getting the shares at the time of allotment
from the company, try to purchase the shares on the listing day. As a result the price of the shares increases
on the listing day and provides decent returns to them who get the shares at the time of allotment. This leads
to underpricing. The other descriptive of the returns on the day of listing and the graph are shown below in
fig 2.

The investors knowing the concept of underpricing of IPOs in short run due to short term sentiments of the
market, should book the profit the moment they recognize it. After some time when the market starts moving
down, the prices of these shares also decreases and not bounce back with the market. Hence for retail
investors, investment in the IPOs is not advisable for the long term

From fig 2 it can be seen that more than 60% of IPO provided positive returns, also there are about 30 IPOs
that provides returns more than 50% on the listing day. Approx. 20% of IPOs provided the returns in the
range 11 to 30 per cent on the listing day. The history of high returns provided by the IPOs in Indian Stock
market makes them attractive investment options for the Investors

60
 CHAPTER 5. CONCLUSION AND SUGGESTION

No one is a born expert when it comes to stock trading. It is all learned with experience and by being there.
There is no person who can claim to be born with the talent of reading the stock market correctly.

An IPO being the first offer of stock by a company to the general public not only provides them largest
source of funds with long or indefinite maturity but also gives an opportunity to investors for buying the
shares directly from the company at the price of their choice (in book build IPO's). There are several reasons
for a firm to go public and the motives are often specific to the given firm. The growing entrepreneurs
approach the new issue market to finance their business expansion activities and also acquire a global
exposure and recognition by listing at the stock exchange. Various other specific benefits (for coming out
with an IPO) from a company’s perspective include diversifying equity base, attracting and retaining better
management and employees through liquid equity participation, facilitating acquisitions and increased
liquidity of the investments for the former owners. And from an investor’s perspective, investment in the
IPOs now provides them the part of the ownership and gives them a hope to enjoy share in the profits,
earned by the company in the future. They seek to yield a maximum return on their investments. Hence an
IPO is very crucial for company's growth as well as for investor’s confidence

From all these above findings, overall it concluded that the most of the companies want to go public in the
underpriced market. The IPOs underpriced on the listing day or in the short run but after a month of listing,
the IPOs underperformed in the long run. It observed that the IPOs usually overperformed in the starting
listing days but over a long period of time, the shares overpriced. Because the IPO companies loosen their
value in the market due to the investor’s weak faith for the issuing companies. The issuing companies
oversubscribed or undersubscribed on the basis of the investors demand for the IPO shares. As the
subscription level gone up, the IPO returns moved in the same direction and showed the more underpricing.
It means the investors’ response to the IPO subscription showed positive relationship with the IPOs return
performance.

As observed that the IPOs were unevenly distributed during the study period. The market momentum
affected the issuance of the IPOs. The more number of IPOs issued when the market is rising and the
sentiment of investors for IPOs is also rising. It is suggested to the issuing companies and regulatory
authorities to issue the IPOs evenly every year. Thus, the IPOs capital is raised when it is ensure that the
IPOs are evenly distributed. When the IPOs will evenly distribute, the investors will rationally behaved. It
depicted that the IPOs underpriced on the listing day and earn gains but recorded fall consistently over the
short run and long run. The investors should first analyze the historical chats of the market momentum,
company prospects and risk factors which affect the IPOs before make IPO investment decision. The IPO
rating grades are already compulsory by the SEBI for the investor’s protection. The SEBI should make some
61
efforts for IPO rating grades given by rating agencies for more investors rationality found in grading. The
rating grades based on the IPO companies fundamentals and ensure to provide better returns.

Although the IPO market is currently low due to the economic barriers the recent changes in policies
appreciate the growth of IPO market in India. Also the positive attitude of people towards investment in IPO
ensures the growth of IPO market. Also measures are to be taken to solve problems relating to applying
while IPO.

62
BIBLIOGRAPHY

[Link]

[Link]

[Link]

[Link]

[Link]

[Link]

[Link]

63
 APPENDIX
Primary data- Questionnaire

1. Your age

0-25

26-30

31-50

Above 50

2. Your gender

Male

Female

Prefer not to say

other

3 You are

Student

Employee

businessman

Professional

Other

4 your annual income

Upto 5 lakh

5 to 7 lakh

7-9 lakh

More than 9 lakh

5 where do you invest your savings

Fds

64
Primary market

Secondary market

Gold/ silver

Others

6 Are you aware of IPO

Yes

No

Maybe

7 have you ever participated in IPO

Yes

No

8 If not, do you wish to do it in future

Yes

no

9 reasons for investing in IPO

Returns in long run

Listing gains

Others

10 what do you see before investing in IPO

Promoter’s background

Sector performance

Performance of existing company

Others

65
11 did you face any difficulties while investing in IPO

Yes

No

12 if yes, What difficulties did you face after applying for IPOs

Refund problem

No clarity in allotment

Others

13 What do think about growth of IPOs in near future

Extremely high

High

Normal

Low

Extremely low

14 How is procedure of IPO

Easy

Difficult

Complicated

15 How would you rate IPO on as an investment option

Excellent

Above average

Average

Below average

Very poor

66
Secondary data

Issu Issu
e e
sr Ope Clos Issu Issue Issue Listing
no Issuer Company n e e Size Price Day
Jan Jan BB 189.8 165 16.12%
Infinite Computer Solutions India Ltd IPO 11, 13,
1 2010 2010
Jan Jan BB 328.72 145 57.93%
Jubilant Foodworks Ltd IPO 18, 20,
2 2010 2010
Jan Feb BB 150 215
Aqua Logistics Ltd IPO 25, 2,
3 2010 2010
Jan Jan BB 28.76 75 -5.20%
Thangamayil Jewellery Limited IPO 27, 29,
4 2010 2010
Jan Jan BB 56.25 75 17.13%
Syncom Healthcare Limited IPO 27, 29,
5 2010 2010
Jan Jan BB 178.2 165 -
Vascon Engineers Limited IPO 27, 29, 10.79%
6 2010 2010
Jan Feb BB 1,500.0 468 -2.69%
D B Realty Limited IPO 29, 2, 0
7 2010 2010
Feb Feb BB 38.96 45 -
Emmbi Polyarns Limited IPO 1, 3, 36.33%
8 2010 2010
Feb Feb BB 103 450 63.62%
ARSS Infrastructure Projects Ltd IPO 8, 11,
9 2010 2010
Feb Feb BB 666 240 -
Hathway Cable & Datacom Ltd IPO 9, 11, 13.42%
10 2010 2010
Feb Feb BB 45 90 52.50%
Texmo Pipes & Products Ltd IPO 16, 19,
11 2010 2010
Feb Feb BB 141.75 252 38.19%
Man Infraconstruction Ltd IPO 18, 22,
12 2010 2010
Feb Feb BB 324.98 66 4.24%
United Bank of India IPO 23, 25,
13 2010 2010
Mar Mar BB 128.16 80 35.69%
DQ Entertainment (International) Ltd IPO 8, 10,
14 2010 2010
Mar Mar BB 116.6 110 -2.59%
Pradip Overseas Limited IPO 11, 15,
15 2010 2010

67
 Mar Mar BB 700 258 6.10%
IL&FS Transportation Networks Ltd IPO 11, 15,
16 2010 2010
Mar Mar BB 168.01 310 31.61%
Persistent Systems Limited IPO 17, 19,
17 2010 2010
Mar Mar BB 371.02 260 -
Shree Ganesh Jewellery House Ltd IPO 19, 23, 37.21%
18 2010 2010
Mar Mar BB 126.51 135 -5.30%
Goenka Diamond & Jewels Ltd IPO 23, 26,
19 2010 2010
Mar Mar BB 53.65 145 9.90%
Intrasoft Technologies Limited IPO 23, 26,
20 2010 2010
Apr Apr BB 77.44 128 27.03%
Talwalkars Better value Fitness Ltd IPO 21, 23,
21 2010 2010
Apr Apr BB 405 54 -5.65%
Nitesh Estates Limited IPO 23, 27,
22 2010 2010
Apr Apr BB 63.75 75 -
Tarapur Transformers Limited IPO 26, 28, 24.13%
23 2010 2010
Apr Apr BB 107.9 130 2.81%
Mandhana Industries Limited IPO 27, 29,
24 2010 2010
Apr Apr BB 0
Tara Health Foods Limited IPO 28, 30,
25 2010 2010
Apr May BB 1,650.0 102 -
Jaypee Infratech Ltd IPO 29, 4, 0 10.49%
26 2010 2010
Apr May BB 1,062.7 26 -3.65%
SJVN Ltd (Satluj Jal Vidyut Nigam Ltd) IPO 29, 3, 4
27 2010 2010
Jun Jun BB
Fatpipe Networks India Limited IPO 7, 9,
28 2010 2010
Jun Jun BB 200 75 -
Parabolic Drugs Limited IPO 14, 17, 13.60%
29 2010 2010
Jun Jun BB 53.1 118 68.73%
Aster Silicates Ltd IPO 24, 28,
30 2010 2010
Jun Jul 2, BB 71.66 240 23.19%
Technofab Engineering Ltd IPO 29, 2010
31 2010
Jul 5, Jul 7, BB 270 166 13.98%
Hindustan Media Ventures Ltd IPO
32 2010 2010
Jul Jul BB 59.85 133
Midfield Industries Ltd IPO 19, 21,
33 2010 2010
Jul Aug BB 1,628.7 985 10.52%
SKS Microfinance Ltd IPO 28, 2, 8
34 2010 2010
Aug Aug BB 297 660 14.89%
35 Bajaj Corp Limited IPO
68
 2, 5,
2010 2010
Aug Aug BB 68.75 110 70.86%
Prakash Steelage Ltd IPO 5, 10,
36 2010 2010
Aug Aug BB 500 46 17.50%
Gujarat Pipavav Port Ltd (GPPL) IPO 23, 26,
37 2010 2010
Sep Sep BB 357 29 -
Indosolar Ltd IPO 13, 15, 18.28%
38 2010 2010
Sep Sep BB 115 310 103.98
Career Point Infosystems Ltd IPO 16, 21, %
39 2010 2010
Sep Sep BB 147.5 118 -6.02%
Microsec Financial Services Ltd IPO 17, 21,
40 2010 2010
Sep Sep BB 350 175 8.60%
Eros International Media Ltd IPO 17, 21,
41 2010 2010
Sep Sep BB 248.07 11 2.27%
Electrosteel Integrated Ltd IPO 21, 24,
42 2010 2010
Sep Sep BB 530 450 -
Ramky Infrastructure Ltd IPO 21, 23, 13.92%
43 2010 2010
Sep Sep BB 900 47 -4.47%
Orient Green Power Company Ltd IPO 21, 24,
44 2010 2010
Sep Sep BB 125 1,310. 30.49%
VA Tech Wabag Ltd IPO 22, 27, 00
45 2010 2010
Sep Sep BB 105 135 -
Cantabil Retail India Ltd IPO 22, 27, 22.41%
46 2010 2010
Sep Sep FP 40.5 50 63.20%
Gallantt Ispat Ltd IPO 22, 24,
47 2010 2010
Sep Sep BB 267.91 355
Tecpro Systems Ltd IPO 23, 28,
48 2010 2010
Sep Sep BB 225 324 2.89%
Ashoka Buildcon Ltd IPO 24, 28,
49 2010 2010
Sep Sep BB 50.2 100 6%
Sea TV Network Ltd IPO 27, 29,
50 2010 2010
Sep Oct BB 91.8 102 77.25%
Bedmutha Industries Ltd IPO 28, 1,
51 2010 2010
Sep Oct BB 153 127 -
Commercial Engineers & Body Builders Co
30, 5, 11.61%
Ltd IPO
52 2010 2010
Oct Oct BB 190.45 248 52.62%
BS Transcomm Ltd IPO 6, 13,
53 2010 2010
Oct Oct BB 1,028.6 260 8.83%
54 Oberoi Realty Ltd IPO
69
 6, 8, 1
2010 2010
Oct Oct BB 1,200.0 183 5.22%
Prestige Estates Projects Ltd IPO 12, 14, 0
55 2010 2010
Oct Oct BB 54.67 71 14.86%
Gyscoal Alloys Ltd IPO 13, 15,
56 2010 2010
Oct Oct BB 15,199. 245 39.73%
Coal India Limited IPO 18, 21, 44
57 2010 2010
Nov Nov BB 45 125 68.32%
Gravita India Ltd IPO 1, 3,
58 2010 2010
Nov Nov BB 48.75 75 -8.07%
RPP Infra Projects Ltd IPO 18, 22,
59 2010 2010
Nov Dec BB 300 228 -9.71%
Claris Lifesciences Limited IPO 24, 2,
60 2010 2010
Nov Dec BB 1,237.5 375 24.40%
MOIL Limited IPO 26, 1, 1
61 2010 2010
Dec Dec BB 73.6 64 25.08%
Ravi Kumar Distilleries Ltd IPO 8, 10,
62 2010 2010
Dec Dec BB 675 400 -
A2Z Maintenance & Engineering Services Ltd
8, 10, 17.78%
IPO
63 2010 2010
Dec Dec BB 470.82 120 5.88%
Punjab & Sind Bank IPO 13, 16,
64 2010 2010
Dec Dec FP 36 30 58.33%
Shekhawati Poly-Yarn Ltd IPO 27, 29,
65 2010 2010
Dec Jan BB 165 110
C Mahendra Exports Ltd IPO 31, 6,
66 2010 2011
Jan Jan BB 60 70
Midvalley Entertainment Ltd IPO 10, 12,
67 2011 2011
Jan Jan BB 79.38 98 -
Omkar Speciality Chemicals Ltd IPO 24, 27, 52.86%
68 2011 2011
Feb Feb BB 69.98 77 46.88%
Sudar Garments Ltd IPO 21, 24,
69 2011 2011
Feb Feb BB 170 90 9.39%
Acropetal Technologies Ltd IPO 21, 24,
70 2011 2011
Feb Feb BB 29.48 70 101.29
Fineotex Chemical Ltd IPO 23, 25, %
71 2011 2011
Mar Mar BB 93.28 205 21.56%
Lovable Lingeries Ltd IPO 8, 11,
72 2011 2011
Mar Mar BB 438.76 28 -
73 PTC India Financial Services Ltd IPO
70
 16, 18, 11.07%
2011 2011
Mar Mar BB 55.88 69 -
Shilpi Cable Technologies Ltd IPO 22, 25, 31.01%
74 2011 2011
Apr Apr BB 901.25 175 0.71%
Muthoot Finance Ltd IPO 18, 21,
75 2011 2011
Apr Apr BB 45.83 35 -
Paramount Printpackaging Ltd IPO 20, 25, 23.86%
76 2011 2011
Apr Apr BB 750 10 -17%
Future Ventures India Ltd IPO 25, 28,
77 2011 2011
Apr Apr BB 219.58 117
Innoventive Industries Ltd IPO 26, 29,
78 2011 2011
Apr Apr BB 60 29 -
Servalakshmi Paper Ltd IPO 27, 29, 34.48%
79 2011 2011
Apr May BB 49 49 -
Vaswani Industries Ltd IPO 29, 3, 63.78%
80 2011 2011
May May BB 36.9 85 31.47%
Sanghvi Forging & Engineering Ltd IPO 4, 9,
81 2011 2011
May May BB 117 234
Aanjaneya Lifecare Ltd IPO 9, 12,
82 2011 2011
May May BB 0
Galaxy Surfactants Ltd IPO 13, 19,
83 2011 2011
May Jun BB 23.25 63
Timbor Home Limited IPO 30, 2,
84 2011 2011
May Jun BB 25.75 40 -
VMS Industries Ltd IPO 30, 2, 28.75%
85 2011 2011
Jun Jun BB 40.64 72 66.18%
Rushil Decor Ltd IPO 20, 23,
86 2011 2011
Jun Jun BB 65.18 10
Birla Pacific Medspa Ltd IPO 20, 23,
87 2011 2011
Jun Jun BB 34.75 108 -
Readymade Steel India Ltd IPO 27, 29, 38.47%
88 2011 2011
Jul Jul BB 55.1 82 -
Bharatiya Global Infomedia Ltd IPO 11, 14, 62.26%
89 2011 2011
Jul Jul BB 81.9 117 77.74%
Inventure Growth & Securities Ltd IPO 20, 22,
90 2011 2011
Jul Jul BB 1,245.0 52 -3.94%
L&T Finance Holdings Limited IPO 27, 29, 0
91 2011 2011
Aug Aug BB 113.83 135 -
92 Tree House Education & Accessories Ltd IPO
71
 10, 12, 13.67%
2011 2011
Aug Aug BB 63 100 -
Brooks Laboratories Ltd IPO 16, 18, 39.80%
93 2011 2011
Aug Aug BB 203 58 -
SRS Limited IPO 23, 26, 41.98%
94 2011 2011
Aug Aug BB 227 256 7.34%
TD Power Systems Ltd IPO 24, 26,
95 2011 2011
Sep Sep BB 120.65 210 96.02%
PG Electroplast Limited IPO 7, 12,
96 2011 2011
Sep Sep BB 60 138 66.30%
Prakash Constrowell Ltd IPO 19, 21,
97 2011 2011
Sep Sep BB 35.55 79 -
RDB Rasayans Ltd IPO 21, 23, 66.46%
98 2011 2011
Sep Oct BB 90
Swajas Air Charters Ltd IPO 26, 5,
99 2011 2011
Sep Sep FP 60 60 -
Tijaria Polypipes Ltd IPO 27, 29, 69.83%
100 2011 2011
Sep Oct BB 36.85 110 32.64%
Onelife Capital Advisors Ltd IPO 28, 4,
101 2011 2011
Sep Oct BB 93 186 70.73%
M and B Switchgears Ltd IPO 28, 5,
102 2011 2011
Sep Oct BB 104.63 155 7.35%
Flexituff International Ltd IPO 29, 5,
103 2011 2011
Sep Oct BB 82.5 150
Taksheel Solutions Ltd IPO 29, 4,
104 2011 2011
Sep Oct BB 29.6 74 -
Indo Thai Securities Limited IPO 30, 5, 68.92%
105 2011 2011
Dec Jan BB
Goodwill Hospital & Research Centre Ltd IPO 30, 9,
106 2011 2012
Feb Feb BB 663.31 1,032. 25.68%
Multi Commodity Exchange of India Ltd IPO 22, 24, 00
107 2012 2012
Mar Mar BB 25 30 -5%
Olympic Cards Ltd IPO 9, 13,
108 2012 2012
Mar Mar BB 127.2 106 -8.44%
National Buildings Construction Corporation
22, 27,
Ltd IPO
109 2012 2012
Mar Mar BB 99 80 12.94%
MT Educare Limited IPO 27, 29,
110 2012 2012
Apr Apr BB 200 120 -7.33%
111 Tribhovandas Bhimji Zaveri Ltd IPO
72
 24, 26,
2012 2012
May May BB
Samvardhana Motherson Finance Ltd IPO 2, 4,
112 2012 2012
May May BB
Plastene India Limited IPO 9, 15,
113 2012 2012
May May BB 176.09 150 7.10%
Speciality Restaurants Ltd IPO 16, 18,
114 2012 2012
Jun Jul 4, BB 55 55 1.09%
VKS Projects Ltd IPO 29, 2012
115 2012
Nov Nov BB 183.49 230 -0.02%
Tara Jewels Limited IPO 21, 23,
116 2012 2012
Dec Dec BB 539.98 750 23.19%
Credit Analysis & Research Ltd IPO 7, 11,
117 2012 2012
Dec Dec BB 609.3 135 10.37%
PC Jeweller Ltd IPO 10, 12,
118 2012 2012
Dec Dec BB 4,155.8 220 -
Bharti Infratel Limited IPO 11, 14, 0 13.09%
119 2012 2012
Feb Feb BB 94.42 210 -2.26%
V-Mart Retail Ltd IPO 1, 5,
120 2013 2013
Feb Feb BB
Sai Silks (Kalamandir) Ltd IPO 11, 13,
121 2013 2013
Mar Mar BB 270.39 172 -6.48%
Repco Home Finance Ltd IPO 13, 15,
122 2013 2013
Apr May BB
Scotts Garments Ltd IPO 25, 3,
123 2013 2013
May May BB 919.14 530 15.37%
Just Dial Ltd IPO 20, 22,
124 2013 2013
Mar Mar BB
Loha Ispaat Ltd IPO 11, 25,
125 2014 2014
Apr Apr BB 181.25 125 26.08%
Wonderla Holidays Ltd IPO 21, 23,
126 2014 2014
Aug Aug BB 197.4 47 67.55%
Snowman Logistics Ltd IPO 26, 28,
127 2014 2014
Sep Sep BB 351.86 156 48.37%
Sharda Cropchem Ltd IPO 5, 9,
128 2014 2014
Sep Sep BB 120 170 0.59%
Shemaroo Entertainment Ltd IPO 16, 18,
129 2014 2014
Dec Dec BB 350.43 645 -
130 Monte Carlo Fashions Limited IPO
73
 3, 5, 12.19%
2014 2014
Dec Jan BB
NCML Industries Ltd IPO 29, 9,
131 2014 2015
Mar Mar BB 66.11 181 -5%
Ortel Communications Ltd IPO 3, 5,
132 2015 2015
Mar Mar BB 365.87 180 6.25%
Adlabs Entertainment Ltd IPO 10, 12,
133 2015 2015
Mar Mar BB 1,020.5 325 34.77%
Inox Wind Limited IPO 18, 20, 2
134 2015 2015
Apr Apr BB 473.88 205 43.07%
VRL Logistics Ltd IPO 15, 17,
135 2015 2015
Apr Apr BB 324 63 -3.25%
MEP Infrastructure Developers Ltd IPO 21, 23,
136 2015 2015
Apr Apr BB 600 625 -4.19%
UFO Moviez Ltd IPO 28, 30,
137 2015 2015
May May BB 488.44 378 -4.71%
PNC Infratech Limited IPO 8, 12,
138 2015 2015
Jun Jun BB 400 320 2.14%
Manpasand Beverages Ltd IPO 24, 26,
139 2015 2015
Jul Jul BB 550 250 24.16%
Syngene International Ltd IPO 27, 29,
140 2015 2015
Aug Aug BB 273.22 640 -8.48%
Power Mech Projects Ltd IPO 7, 11,
141 2015 2015
Aug Aug BB 600 155 7.35%
Navkar Corporation Limited IPO 24, 26,
142 2015 2015
Aug Aug BB 70 65 -3.08%
Shree Pushkar Chemicals and Fertilisers Ltd
25, 27,
IPO
143 2015 2015
Aug Aug BB 156.19 178 -
Pennar Engineered Building Systems Ltd IPO 25, 27, 11.52%
144 2015 2015
Aug Sep BB 356.19 115 1.17%
Prabhat Dairy Limited IPO 28, 4,
145 2015 2015
Aug Sep BB 491.66 103 3.06%
Sadbhav Infrastructure Project Limited IPO 31, 2,
146 2015 2015
Oct Oct BB 1,150.0 328 -
Coffee Day Enterprises Ltd IPO 14, 16, 0 17.64%
147 2015 2015
Oct Oct BB 3,018.2 765 14.83%
InterGlobe Aviation Ltd IPO 27, 29, 4
148 2015 2015
Oct Oct BB 508.17 180 15.17%
149 S H Kelkar & Company Ltd IPO
74
 28, 30,
2015 2015
Dec Dec BB 1,349.6 1,050. 31.57%
Alkem Laboratories Limited IPO 8, 10, 1 00
150 2015 2015
Dec Dec BB 638 550 49.85%
Dr. Lal PathLabs Limited IPO 8, 10,
151 2015 2015
Dec Dec BB 613.08 250 34.68%
Narayana Hrudayalaya Ltd IPO 17, 21,
152 2015 2015
Jan Jan BB 410 186 -4.70%
Precision Camshafts Ltd IPO 27, 29,
153 2016 2016
Feb Feb BB 423.68 850 20.23%
TeamLease Services Ltd IPO 2, 4,
154 2016 2016
Feb Feb BB 451.25 321 -
Quick Heal Technologies Ltd IPO 8, 10, 20.73%
155 2016 2016
Mar Mar BB 649.64 218 -
Healthcare Global Enterprises Ltd IPO 16, 18, 21.58%
156 2016 2016
Mar Mar BB 70 45 0.89%
Bharat Wire Ropes Ltd IPO 18, 22,
157 2016 2016
Mar Mar BB 450 432 3.17%
Infibeam Incorporation Ltd IPO 21, 23,
158 2016 2016
Apr Apr BB 2,175.0 110 22.95%
Equitas Holdings Limited IPO 5, 7, 0
159 2016 2016
Apr Apr BB 479.21 446 38.59%
Thyrocare Technologies Ltd IPO 27, 29,
160 2016 2016
Apr May BB 887.69 210 10.29%
Ujjivan Financial Services Ltd IPO 28, 2,
161 2016 2016
May May BB 751.78 215 15.26%
Parag Milk Foods Ltd IPO 4, 11,
162 2016 2016
Jun Jun BB 1,039.6 421 23.49%
Mahanagar Gas Limited IPO 21, 23, 4
163 2016 2016
Jun Jul 1, BB 400 317 58.68%
Quess Corp Ltd IPO 29, 2016
164 2016
Jul Jul BB 1,236.0 710 -1.74%
L&T Infotech Ltd IPO 11, 13, 0
165 2016 2016
Jul Jul BB 411.49 896 31.51%
Advanced Enzyme Technologies Ltd IPO 20, 22,
166 2016 2016
Aug Aug BB 653.98 219 15.05%
Dilip Buildcon Ltd IPO 1, 3,
167 2016 2016
Aug Aug BB 239.12 268 10.07%
168 S P Apparels Ltd IPO
75
 2, 4,
2016 2016
Aug Aug BB 1,212.9 225 33.02%
RBL Bank Ltd IPO 19, 23, 7
169 2016 2016
Sep Sep BB 894.4 860 0.59%
L&T Technology Services Ltd IPO 12, 15,
170 2016 2016
Sep Sep BB 130.41 207 18.43%
G N A Axles Ltd IPO 14, 16,
171 2016 2016
Sep Sep BB 6,056.7 334 -
ICICI Prudential Life Insurance Company Ltd
19, 21, 9 10.88%
IPO
172 2016 2016
Sep Sep BB 361 202 -6.41%
HPL Electric & Power Ltd IPO 22, 26,
173 2016 2016
Oct Oct BB 1,161.7 472 37.22%
Endurance Technologies Ltd IPO 5, 7, 3
174 2016 2016
Oct Oct BB 3,000.7 775 14.92%
PNB Housing Finance Ltd IPO 25, 27, 5
175 2016 2016
Oct Oct BB 1,112.5 445 3.80%
Varun Beverages Ltd IPO 26, 28, 0
176 2016 2016
Nov Nov BB
GreenSignal Bio Pharma Ltd IPO 9, 22,
177 2016 2016
Nov Dec BB 510 730 41.37%
Sheela Foam Ltd IPO 29, 1,
178 2016 2016
Dec Dec BB 1,331.8 428 12.27%
Laurus Labs Ltd IPO 6, 8, 0
179 2016 2016
Jan Jan BB 1,243.4 806 32.66%
BSE Limited IPO 23, 25, 3
180 2017 2017
Mar Mar BB 488.53 333 12.06%
Music Broadcast Ltd IPO 6, 8,
181 2017 2017
Mar Mar BB 1,870.0 299 114.30
Avenue Supermarts Limited IPO 8, 10, 0 %
182 2017 2017
Mar Mar BB 238.95 502 -
CL Educate Ltd IPO 20, 22, 16.75%
183 2017 2017
Mar Mar BB 345 460 37.57%
Shankara Building Products Ltd IPO 22, 24,
184 2017 2017
Apr Apr BB 728.56 670 0.87%
S Chand and Company Ltd IPO 26, 28,
185 2017 2017
May May BB 5,921.1 102 -0.21%
IRB InvIT Fund IPO 3, 5, 0
186 2017 2017
May May BB 1,224.3 60 20.83%
187 Housing and Urban Development
76
 8, 11, 5
Corporation Ltd IPO
2017 2017
May May BB 211.68 210 -0.50%
PSP Projects Ltd IPO 17, 19,
188 2017 2017
May May BB 2,250.0 100 -1.55%
IndiGrid InvIT Fund IPO 17, 19, 0
189 2017 2017
Jun Jun BB 776.69 257 2.45%
Tejas Networks Limited IPO 14, 16,
190 2017 2017
Jun Jun BB 1,741.1 603 -0.32%
Eris Lifesciences Limited IPO 16, 20, 6
191 2017 2017
Jun Jun BB 523.99 149 75.57%
Central Depository Services (India) Limited
19, 21,
IPO
192 2017 2017
Jun Jun BB 484.8 170 0.97%
GTPL Hathway Limited IPO 21, 23,
193 2017 2017
Jun Jun BB 1,912.5 358 51.17%
Au Financiers (India) Limited IPO 28, 30, 1
194 2017 2017
Jul Jul FP 35.87 108 139.95
Salasar Techno Engineering Ltd IPO 12, 17, %
195 2017 2017
Jul Aug BB 779.58 815 -7.15%
Security and Intelligence Services (India) Ltd
31, 2,
IPO
196 2017 2017
Aug Aug BB 1,442.0 432 20.83%
Cochin Shipyard Ltd IPO 1, 3, 1
197 2017 2017
Aug Aug BB 152.25 175 19.91%
Apex Frozen Foods Ltd IPO 22, 24,
198 2017 2017
Sep Sep BB 600.65 205 1.54%
Bharat Road Network Limited IPO 6, 8,
199 2017 2017
Sep Sep BB 600 1,766. 63.81%
Dixon Technologies (India) Limited IPO 6, 8, 00
200 2017 2017
Sep Sep BB 496.88 985 -8.51%
[Link] Limited IPO 11, 13,
201 2017 2017
Sep Sep BB 400 250 36.96%
Capacit'e Infraprojects Limited IPO 13, 15,
202 2017 2017
Sep Sep BB 5,700.9 661 3.11%
ICICI Lombard General Insurance Company
15, 19, 4
Ltd IPO
203 2017 2017
Sep Sep BB 8,400.0 700 1.14%
SBI Life Insurance Company Ltd IPO 20, 22, 0
204 2017 2017
Sep Sep BB 481.56 938 25.62%
Prataap Snacks Limited IPO 22, 26,
205 2017 2017
Oct Oct BB 1,157.3 460 29.47%
206 Godrej Agrovet Limited IPO
77
 4, 6, 1
2017 2017
Oct Oct BB 460.04 459 42.65%
MAS Financial Services Ltd IPO 6, 10,
207 2017 2017
Oct Oct BB 1,000.7 1,650. -1.43%
Indian Energy Exchange Ltd IPO 9, 11, 3 00
208 2017 2017
Oct Oct BB 11,175. 912 -4.56%
General Insurance Corporation of India IPO 11, 13, 84
209 2017 2017
Oct Oct BB 1,542.2 252 12.70%
Reliance Nippon Life Asset Management Ltd
25, 27, 4
IPO
210 2017 2017
Oct Nov BB 829.36 429 0.03%
Mahindra Logistics Limited IPO 31, 2,
211 2017 2017
Nov Nov BB 9,600.0 800 -9.37%
The New India Assurance Company Limited
1, 3, 0
IPO
212 2017 2017
Nov Nov BB 543.06 750 -8.20%
Khadim India Limited IPO 2, 6,
213 2017 2017
Nov Nov BB 8,695.0 290 18.71%
HDFC Standard Life Insurance Company Ltd
7, 9, 1
IPO
214 2017 2017
Dec Dec BB 504.8 248 -3.53%
Shalby Limited IPO 5, 7,
215 2017 2017
Dec Dec BB 649.7 664 3.28%
Future Supply Chain Solutions Ltd IPO 6, 8,
216 2017 2017
Dec Dec BB 70 50 139.40
Astron Paper & Board Mill Ltd IPO 15, 20, %
217 2017 2017
Jan Jan BB 156 275 65.13%
Apollo Micro Systems Limited IPO 10, 12,
218 2018 2018
Jan Jan BB 424.62 245 3.27%
Newgen Software Technologies Limited IPO 16, 18,
219 2018 2018
Jan Jan BB 600 859 44.03%
Amber Enterprises India Limited IPO 17, 19,
220 2018 2018
Jan Jan BB 937.09 1,480. 14.74%
Galaxy Surfactants Limited IPO 29, 31, 00
221 2018 2018
Feb Feb BB 980.14 190 -5.34%
Aster DM Healthcare Ltd IPO 12, 15,
222 2018 2018
Feb Feb BB 462 270 0.02%
H.G. Infra Engineering Ltd IPO 26, 28,
223 2018 2018
Mar Mar BB 960.94 428 -8.71%
Bharat Dynamics Ltd IPO 13, 15,
224 2018 2018
Mar Mar BB 4,473.0 375 27.25%
225 Bandhan Bank Limited IPO
78
 15, 19, 2
2018 2018
Mar Mar BB 4,144.0 1,215. -7.13%
Hindustan Aeronautics Limited IPO 16, 20, 6 00
226 2018 2018
Mar Mar BB 77.4 180 -
Karda Construction Ltd IPO 16, 21, 20.67%
227 2018 2018
Mar Mar BB 565.6 332 -2.85%
Sandhar Technologies Limited IPO 19, 21,
228 2018 2018
Mar Mar BB 438.38 90 0%
Mishra Dhatu Nigam Limited IPO 21, 23,
229 2018 2018
Mar Mar BB 4,016.9 520 -
ICICI Securities Ltd IPO 22, 26, 7 14.41%
230 2018 2018
Mar Mar BB 1,038.6 56 27.86%
Lemon Tree Hotels Limited IPO 26, 28, 8
231 2018 2018
May May BB 1,844.0 572 2.36%
IndoStar Capital Finance Limited IPO 9, 11, 0
232 2018 2018
Jun Jun BB 460.51 185 14.97%
RITES Limited IPO 20, 22,
233 2018 2018
Jun Jun BB 600.2 783 5.08%
Fine Organic Industries Limited IPO 20, 22,
234 2018 2018
Jun Jun BB 1,945.7 967 7.61%
Varroc Engineering Limited IPO 26, 28, 7
235 2018 2018
Jul Jul BB 1,125.1 716 -8.13%
TCNS Clothing Co. Limited IPO 18, 20, 3
236 2018 2018
Jul Jul BB 2,800.3 1,100. 65.01%
HDFC Asset Management Company Limited
25, 27, 3 00
IPO
237 2018 2018
Aug Aug BB 1,131.1 422 -0.28%
CreditAccess Grameen Limited IPO 8, 10, 9
238 2018 2018
Sep Sep BB 470.49 475 -
IRCON International Limited IPO 17, 19, 12.28%
239 2018 2018
Sep Oct BB 344.69 118 -
Garden Reach Shipbuilders & Engineers
24, 1, 10.93%
Limited IPO
240 2018 2018
Sep Sep BB 1,734.0 821 -5.83%
Aavas Financiers Limited IPO 25, 27, 7
241 2018 2018
Sep Oct BB
Dinesh Engineers Limited IPO 28, 3,
242 2018 2018
Jan Jan BB 23 66 -9.32%
Xelpmoc Design and Tech Limited IPO 23, 25,
243 2019 2019
Jan Jan BB 1,641.1 280 3.71%
244 Chalet Hotels Limited IPO
79
 29, 31, 8
2019 2019
Mar Mar BB 212.04 120 -4.83%
MSTC Limited IPO 13, 20,
245 2019 2019
Mar Apr BB 481.57 19 0.26%
Rail Vikas Nigam Limited IPO 29, 3,
246 2019 2019
Apr Apr BB 1,204.2 880 9.04%
Metropolis Healthcare Limited IPO 3, 5, 9
247 2019 2019
Apr Apr BB 1,346.0 538 21.75%
Polycab India Limited IPO 5, 9, 0
248 2019 2019
Apr Apr BB 132.35 215 22.58%
Neogen Chemicals Limited IPO 24, 26,
249 2019 2019
Jun Jun BB 475.59 973 33.87%
IndiaMART InterMESH Limited IPO 24, 26,
250 2019 2019
Jul Jul BB 459 745 17.46%
Affle (India) Limited IPO 29, 31,
251 2019 2019
Aug Aug BB 1,202.3 856 -0.89%
Spandana Sphoorty Financial Ltd IPO 5, 7, 4
252 2019 2019
Aug Aug BB 3,145.1 780 -7.01%
Sterling and Wilson Solar Ltd IPO 6, 8, 6
253 2019 2019
Sep Oct BB 60 60 0.58%
Vishwaraj Sugar Industries Ltd IPO 30, 4,
254 2019 2019
Sep Oct BB 645.12 320 127.69
IRCTC Limited IPO 30, 3, %
255 2019 2019
Nov Nov BB 409.68 195 53.90%
CSB Bank Limited IPO 22, 26,
256 2019 2019
Dec Dec BB 750 37 51.08%
Ujjivan Small Finance Bank Ltd IPO 2, 4,
257 2019 2019
Dec Dec BB 500 178 -6.40%
Prince Pipes and Fittings Ltd IPO 18, 20,
258 2019 2019

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