CHAPTER - I

INTRODUCTION

1.1. ABOUT THE STUDY

In today’s globalized economy and competitive environment

companies are increasingly using Initial Public Offerings for raising funds

to finance capital expenditure programs like expansion, diversification,

modernization, mergers, and acquisitions and also to meet out the

increased working capital requirements.

The primary market for equity in India gained momentum after the

liberalization initiative taken by the government in the early 1990s.

Following the improvement in the growth rate of the economy at that time,

there were a large number of IPO’s, particularly during the period 1990-

2004. During the year 2000 the Indian IPO market has been dominated by

retail investors

During the last fifteen years, the Indian IPO market has undergone

many changes that are widely seen to have improved its transparency and

efficiency. In particular, the initial years of liberalization, after 1990-91,

witnessed a boom in the Indian IPO market. With fewer regulations during

this period, many entrepreneurs used the primary market as the main

vehicle to raise capital.

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 Initial Public Issue caught the attention of general public only after

the success of Reliance, when millions of small investors made huge

returns which were unheard of till then. Dhirubhai Ambani was the first

promoter who raised huge amounts through the public issue route to

finance large facilities.

But today the global meltdown had an adverse effect on stock

market and the stock market slump slows IPOS but still due to the current

policy liberalization by SEBI like extension of validity period from three

months to one year and various other liberalized measures hope that it will

encourage companies to go for public through IPO.

This project is an attempt to evaluate the performance of some

selected companies before and after issuing IPO. Before going further a

complete explanation on IPO is necessary

Initial public offering

Initial public offering (IPO), also referred to simply as a "public

offering" or "flotation," is when a company issues common stock or shares

to the public for the first time. They are often issued by smaller, younger

companies seeking capital to expand, but can also be done by large

privately-owned companies looking to become publicly traded.

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 In an IPO the issuer may obtain the assistance of an underwriting

firm, which helps it determine what type of security to issue (common or

preferred), best offering price and time to bring it to market.

An IPO can be a risky investment. For the individual investor, it is

tough to predict what the stock or shares will do on its initial day of trading

and in the near future since there is often little historical data with which to

analyze the company. Also, most IPOs are of companies going through a

transitory growth period, and they are therefore subject to additional

uncertainty regarding their future value. However, in order to make money,

calculated risks need to be taken.

Reasons for listing

When a company lists its shares on a public exchange, it will

almost invariably look to issue additional new shares in order to raise extra

capital 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

IPO, 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

3
shareholders have a right to future profits distributed by the company and

the right to a capital distribution in case of a dissolution.

The existing shareholders will 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 will be 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.

Procedure

IPOs generally involve one or more investment banks as

"underwriters." The company offering its shares, called the "issuer," enters

a contract with a lead underwriter to sell its shares to the public. The

underwriter then approaches investors with offers to sell these shares.

The sale (that is, the allocation and pricing) of shares in an IPO

may take several forms. Common methods include:

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 • Best efforts contract

• Firm commitment contract

• All-or-none contract

• Bought deal
• Dutch auction
• Self distribution of stock

A large IPO is usually underwritten by a "syndicate" of investment

banks led by one or more major investment banks (lead underwriter).

Upon selling the shares, the underwriters keep a commission based on a

percentage of the value of the shares sold. Usually, the lead underwriters,

i.e. the underwriters selling the largest proportions of the IPO, take the

highest commissions—up to 8% in some cases.

The issuer usually allows the underwriters an option to increase the

size of the offering by up to 15% under certain circumstance known as the

greenshoe or overallotment option.

The first sale of stock by a private company to the public. IPOs are

often issued by smaller, younger companies seeking the capital to

expand, but can also be done by large privately owned companies looking

to become publicly traded.

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Business cycle

In the United States, during the dot-com bubble of the late 1990s,

many venture capital driven companies were started, and seeking to cash

in on the bull market, quickly offered IPOs. Usually, stock price spiraled

upwards as soon as a company went public. Investors sought to get in at

the ground-level of the next potential Microsoft and Netscape.

Initial founders could often become overnight millionaires, and due

to generous stock options, employees could make a great deal of money

as well. The majority of IPOs could be found on the Nasdaq stock

exchange, which lists companies related to computer and information

technology. However, in spite of the large amounts of financial resources

made available to relatively young and untested firms (often in multiple

rounds of financing), the vast majority of them rapidly entered cash crisis.

Pricing

Historically, IPOs both globally and in the United States have been

underpriced. The effect of "initial underpricing" an IPO is to generate

additional interest in the stock when it first becomes publicly traded.

Through flipping, this can lead to significant gains for investors who have

been allocated shares of the IPO at the offering price. However,

underpricing an IPO results in "money left on the table"—lost capital that

6
could have been raised for the company had the stock been offered at a

higher price.

The danger of overpricing is also an important consideration. If a

stock is offered to the public at a higher price than the market will pay, the

underwriters may have trouble meeting their commitments to sell shares.

Even if they sell all of the issued shares, if the stock falls in value on the

first day of trading, it may lose its marketability and hence even more of its

value.

Issue price

A company that is planning an IPO appoints lead managers to help it

decide on an appropriate price at which the shares should be issued.

There are two ways in which the price of an IPO can be determined: either

the company, with the help of its lead managers, fixes a price or the price

is arrived at through the process of book building.

Note: Not all IPOs are eligible for delivery settlement through the DTC

system, which would then either require the physical delivery of the stock

certificates to the clearing agent bank's custodian, or a delivery versus

payment (DVP) arrangement with the selling group brokerage firm . This

information is not sufficient.

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Quiet period

There are two time windows commonly referred to as "quiet periods"

during an IPO's history. The first and the one linked above is the period of

time following the filing of the company's S-1 but before SEC staff declare

the registration statement effective. During this time, issuers, company

insiders, analysts, and other parties are legally restricted in their ability to

discuss or promote the upcoming IPO.

The other "quiet period" refers to a period of 40 calendar days

following an IPO's first day of public trading. During this time, insiders and

any underwriters involved in the IPO, are restricted from issuing any

earnings forecasts or research reports for the company. Regulatory

changes enacted by the SEC as part of the Global Settlement, enlarged

the "quiet period" from 25 days to 40 days on July 9, 2002.

8
1.2 ABOUT THE INDUSTRY

What and Why of Securities Market?

In every economic System, some units which may be individual or

Institution are surplus-generating while others are deficit-generating.

• Surplus-Generating Units are called Savers while Deficit-generating units

are called spenders.

• Households are surplus-generating and Corporates and

Government are deficit generators.
• By placing the surplus funds in Financial claims or Financial
securities the Spending community gets funds at a cost and saving
community gets
• various benefits like interest, dividend, capital appreciation, Bonus

etc.

• The Surplus generating units (Savers) are investors and Deficit

generating units (spenders) are issuers.
• These investors and issuers of financial securities constitute two
important elements of the securities markets.
• The third critical element of markets is the intermediaries who act
as conduits between the investors and issuers.
• Regulatory bodies, which regulate the functioning of the securities
markets, constitute the last but very significant element of securities
markets.

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• Thus the four important elements of securities markets are:
• Investors

• Issuers

• Intermediaries

• Regulators

Securities Can be

• Government or Industrial
• Long-term or short-term

• Primary Market or Secondary Market

Primary Market is the segment in which new issues are made

whereas secondary market is the segment in which outstanding issues are

traded. It is for this reason that the Primary Market is called the New

issues Market and the secondary market is called Stock Market.

History of Indian Stock Market

• From Scattered and small beginning in the 19th Century, India’s

stock market has risen to great heights.
• By 1990, we had 19 stock exchanges in the country.
• There were around 6,000 listed companies and the investors

population stood around 15 Million.

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Role & Functions of Stock Exchange

In Union of India Vs. Allied International Products Ltd. [ (1971) 41

Comp Cas 127 SC]: (1970) 3 SCC 5941), the Supreme Court of India has

enunciated the role of the Stock Exchanges in these words:

“A Stock Exchange fulfills a vital function in the economic

development of a nation: its main function is to ‘liquify’ capital by enabling

a person who has invested money in, say a factory or railway, to convert it

into cash by disposing off his shares in the enterprise to someone else.

Investment in Joint stock companies is attractive to the public, because

the value of the shares is announced day after day in the stock

exchanges, and shares quoted on the exchanges are capable of almost

immediate conversion into money. In modern days a company stands little

chance of inducing the public to subscribe to its capital, unless its shares

are quoted in an approved stock exchange. All public companies are

anxious to obtain permission from reputed exchanges for securing

quotations of their shares and the management of a company is anxious

to inform the investing public that the shares of the company will be

quoted on the stock exchange”.

The stock exchange is really an essential pillar of the private sector

corporate economy. It discharges three essential functions:

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 First, the stock exchange provides a market place for purchase and

sale of securities viz. shares, bonds, debentures etc. It, therefore, ensures

the free transferability of securities which is the essential basis for the joint

stock enterprise system.

Secondly, the stock exchange provides the linkage between the

savings in the household sector and the investment in the corporate

economy. It mobilizes savings, channelises them as securities into these

enterprises which are favoured by the investors on the basis of such

criteria as future growth prospects, good returns and appreciation of

capital.

Thirdly, by providing a market quotation of the prices of shares and

bonds- a sort of collective judgment simultaneously reached by many

buyers and sellers in the market- the stock exchange serves the role of a

barometer, not only of the state of health of individual companies, but also

of the nation’s economy as a whole.

Regulation of Stock Market

Since the savings of the investing community namely, public, needs

to be protected from various kinds of malpractices, frauds, defaults etc., it

was obligatory on the part of the Governing system to establish

Regulatory bodies.

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 UK and USA had long back created separate boards for the

regulation of the securities market. U.K has the Securities and Investment

Board (SIB) and U.S. has the Securities and Exchange Commission

(SEC). The Indian Government’s intention to set up a separate board for

the regulation and orderly functioning of the capital market was first

declared in the Budget speech by Shri. RajivGandhi, the then Prime

Minister and Minister of Finance, while presenting the Budget for the year

1987-88. He stated:

“The Capital Markets in India have shown tremendous growth in the

last few years. Approvals for capital issues have exceeded Rs.5,000

crores in 1986-87. They were only about Rs.500 Crores in 1980-81. For a

healthy growth of capital markets, investors must be fully protected.

Trading malpractices must be prevented. Government have decided to set

up a separate board for the regulation and orderly functioning of stock

exchange and the securities industry”.

By a notification issued on 12th April’1988, Securities and

Exchange Board of India (SEBI) was constituted as an interim

administrative body to function under the overall administrative control of

the Ministry of Finance of the Central Government.

In July 1988, the SEBI, constituted as a foresaid, published an

approach paper on comprehensive legislation for securities market.

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 The SEBI was given a statutory status on 30th January,1992 by an

ordinance to provide for the establishment of SEBI. A Bill to replace the

Ordinance was introduced in parliament on 3rd march, 1992 and was

passed y both houses of parliament on 1st April’1992. The Bill became an

act on 4th April’1992 the date on which it is received the President’s

assent. However, as provided for in section 1(3), this act is to be deemed

to have come into force on 30th January, 1992, i.e. the date on which the

SEBI ordinance was promulgated.

FUNCTIONS OF SEBI

Section 11 of the SEBI Act,

Organisation Structure of SEBI

- A Chairman( to be appointed by Central Govt.)

- Two members from amongst the officials of the

Ministries of the C.Govt. dealing with Finance and Law.

- One Member from RBI

- Two members to be appointed by Central Govt.

Activities of SEBI

- Rules regarding registration of intermediaries

- Guidelines and Code of Conduct for Merchant Bankers

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 - Categorisation of Merchant Bankers

- Guidelines for Portfolio Management Services

- Ciruclars on various issues (Periodical)

- Guidelines for Leadmanagers

- Regulation for Registrars and Share-Transfer agents

- Guidelines for IPO’s, Debt. Instruments

- Regulation on Insider trading

- Guidelines for Mutual funds

- Regulation on take overs

- Code for Corporate Governance

- Consultative Paper on free market pricing of Capital Issues.

- Advisory committees for Primary and Secondary Market

reviews

- Investor Protection guidelines

- Guidelines on SRO’s for Merchant Bankers

- Regulation of Futures and Options, Index Market

- Informal Guidance

Significance of Securities Market in the Growth of an Economy

The banks and securities markets are two competing mechanisms

to channel savings to investment. The securities markets score over

15
banks in the allocational efficiency, as it allocates savings to those

investments which have potential to yield higher returns. This inevitably

leads to higher returns to savers on their savings and higher productivity

on investments to enterprises. Hence to the extent economic growth

depends on the rate of return on investments, securities market promotes

economic growth.

With this brief background, I propose to talk first about functions of

the securities market, then its role and importance in the growth of an

economy, then how a liberalized securities market promotes economic

growth, then talk about its significance in the Indian economy and finally,

significance of the market in the growth of Indian economy.

Functions of Securities Market

The securities market allows people to do more with their savings

than they would otherwise. It also allows people to do more with their

ideas and talents than would otherwise be possible. The people’s savings

are matched with the best ideas and talents in the economy. Stated

formally, the securities market provides a linkage between the savings

and the preferred investment across the entities, time and space. It

mobilizes savings and channelises them through securities into preferred

enterprises.

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 The securities market enables all individuals, irrespective of their

means, to share the increased wealth provided by competitive enterprises.

The securities market allows individuals who can not carry an activity in its

entirety within their resources to invest whatever is individually possible

and preferred in that activity carried on by an enterprise. Conversely,

individuals who can not begin an enterprise they like can attract enough

investment form others to make a start and continue to progress and

prosper. In either case, individuals who contribute to the investment share

the fruits.

The securities market also provides a market place for purchase

and sale of securities and thereby ensures transferability of securities,

which is the basis for the joint stock enterprise system. The liquidity

available to investors does not inconvenience the enterprises that

originally issued the securities to raise funds. The existence of the

securities market makes it possible to satisfy simultaneously the needs of

the enterprises for capital and of investors for liquidity.

The liquidity the market confers and the yield promised or

anticipated on security encourages people to make additional savings out

of current income. In the absence of the securities market, the additional

savings would have been consumed otherwise. Thus the provision of

securities market results in net savings.

17
1.3 ABOUT THE COMPANY

INTRODUCTION

Emkay Global Financial Services Ltd. (EMKAY), a truly Indian,

dynamic and visionary firm, and a trusted name in the financial services

arena, offers the entire gamut of advisory services under one roof. Right

from investing, trading, research and financial planning to portfolio

management services, we provide our clients with integrated, robust and

reliable solutions to satisfy all their financial needs.

Our extensive research capabilities, high degree of integrity and

confidentiality in carrying out client transactions, superior technology

backed systems and strong domain expertise in both, the cash and

derivatives segments, makes us the preferred investment house for all

categories of investors.

Over and above broking services, we have been successfully

distributing savings/investment instruments, such as mutual fund

schemes, saving bonds, IPOs, etc.

In addition, we enable our clients to trade in commodities through

our group subsidiary ‘Emkay Commotrade Limited’ as we are members of

both the Multi-Commodity Exchange (MCX) and the National Commodity

& Derivatives Exchange (NCDEX).

18
 We cater to the financial needs of institutional as well as the retail

clients and high net worth individuals. Our ever expanding and diversified

customer base gives us the strength and confidence to weather the

volatility of the stock market. It also enables us to maintain high levels of

customer service during volatile times. EMKAY meets the support needs

of this investor base through execution skills driven by an experienced

sales team and research-backed advice generated by a team of highly

experienced analysts.

COMPANY PHILOSOPHY

With the increased momentum in business activities in India, the

winds of change blowing across the country has further gathered pace.

The Indian economy is now at an inflexion point and is gearing for

sustained and continuous growth over the years to come. Indeed, it is the

right time to invest and define destiny.

Despite the steady progress made over the years, the cultural and

geographic diversity of the country poses unique business challenges that

have never been easy to understand. Emkay, through a journey that

began over a decade, has been witness to the ups and downs of it all.

At Emkay we believe in offering solution-oriented structures to all our

clients rather than just selling generic products. We offer personalised

19
attention to all portfolio clients with customisation of each portfolio in line

with investor risk and return profiles. We manage over Rs 5,000 crore

under our Wealth Management and PCG businesses, and have a

consistent record of excellent past performance. Being one of the few

large publicly listed brokerage houses in the country, we maintain high

level of transparency with strong service deliverables.

OUR OFFERINGS

• Equity and derivatives broking (retail and institutional)

• Equity research

• Corporate Advisory

• Depository services

• Wealth Management and Portfolio Management Services

• Insurance Broking

• Investment Banking

• Commodities research and broking

• E-broking

• Mutual fund distribution

• IPOs

20
COMPANY PHILOSOPHY

With the increased momentum in business activities in India, the

winds of change blowing across the country has further gathered pace.

The Indian economy is now at an inflexion point and is gearing for

sustained and continuous growth over the years to come. Indeed, it is the

right time to invest and define destiny.

Despite the steady progress made over the years, the cultural and

geographic diversity of the country poses unique business challenges that

have never been easy to understand. Emkay, through a journey that

began over a decade, has been witness to the ups and downs of it all.

At Emkay we believe in offering solution-oriented structures to all our

clients rather than just selling generic products. We offer personalised

attention to all portfolio clients with customisation of each portfolio in line

with investor risk and return profiles. We manage over Rs 5,000 crore

under our Wealth Management and PCG businesses, and have a

consistent record of excellent past performance. Being one of the few

large publicly listed brokerage houses in the country, we maintain high

level of transparency with strong service deliverables.

21
MISSION AND VALUES

Emkay’s mission

• To provide our clients with secure, customised and comprehensive

financial solutions to achieve sustained growth.

Emkay’s values

• To be fair, empathetic and responsive in serving our clients.

• To respect and reinforce our fellow employees and the power of

teamwork.

• To strive relentlessly to improve what we do and how we do it.

• To always earn and be worthy of our customers’ trust.

22
CORPORATE STRUCTURE

Emkay Fincap Limited (EFL), a 100 per cent subsidiary of EMKAY, is a

RBI registered Non Deposit taking NBFC. The firm was incorporated on
May 16, 2005 for carrying out share financing activities. The company
went public on February 14, 2006.

23
Emkay Commotrade Limited (ECL), a 100 per cent subsidiary of

EMKAY, was incorporated on January 5, 2006 and carries out commodity

broking business. ECL is a member of the two popular commodity

exchanges – MCX Commodity Exchange and NCDEX Commodity

Exchange.ECL offers trading in many commodities such as bullion (gold,

silver), energy (crude oil, natural gas), metals, food grains (rice, maize),

spices, oil and oil seeds and others.

Emkay Insurance Brokers Limited (EIBL), a 100 per cent subsidiary of

EMKAY, was incorporated on March 8, 2007 as a direct Insurance broker

as per the IRDA regulations. Focusing on life and non-life businesses, the

company aims to benefit from its huge existing retail client base and

existing corporate relationships.

KEY MILESTONES

• 1995: Year of incorporation

• 1996: Commenced equity broking on BSE

• 1999: Commenced equity broking on NSE

• 2000: Executed first trade in Sensex Futures and Sensex Options

• 2005: Converted into a public limited company

• 2006: Successfully launched Rs. 75 crore IPO and listed on

BSE/NSE

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• 2006: Commenced commodity broking

• 2006: Incorporated and launched RBI approved NBFC

• 2007: Launched IRDA approved insurance broking subsidiary

• 2008: Crossed the landmark of Rs. 100 crore topline

25
1.4 CHAPTER SCHEME

The study is presented in the first four chapters.

The first chapter deals with the introduction about the study, industry

profile, company profile.

The second chapter presents Objectives of the study , Scope of the

study, Limitations of the study, Research Methodology.

The third chapter deals with Data Analysis and Interpretation.

The fourth chapter deals with summary of findings, suggestions and

conclusions.

26
 CHAPTER – II

MAIN THEME OF THE PROJECT

2.1 OBJECTIVES OF THE STUDY

• To study about the overall performance evaluation of the company

listed in CNX 500 through IPO.

• To analyze and evaluate the performance of the company listed in

CNX 500 through IPO.

• To examine the corporate performance before and after issuing Initial

Public Offerings.

• To analyze the impact of Initial Public Offerings on the overall

performance of the issued company.

• To measure up the return to shareholders during the post IPO periods.

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2.2 SCOPE OF THE STUDY

There is lot of scope for improvement in the research for

evaluating S&P CNX 500 through IPO performances. Various other multi-

criteria decision models could be tested for evaluating S&PCNX 500

through IPO performances. It is used to examine the corporate

performance before and after issuing Initial Public Offerings Testing of

fund performances in the long run can be done. Extended sample of

public-sector sponsored, private sector Indian sponsored and private-

sector foreign sponsored S&P CNX 500 can be taken for generating

results. All the performance are calculated for growth/dividend

reinvestment plan. Average returns of diversified equity schemes have

been calculating out performance over S&P CNX 500 index. All diversified

equity funds with atleast 5 calendar years track record and with

benchmark index as S&P CNX 500 are considered for analysis.

28
Limitations of the Study

• The Study Was Confined only to the companies listed in S&P CNX

500 has only been taken for the study other companies were not

taken into consideration.

• The study was conducted only for five years and so in depth

analysis may not be possible,

• Due to the short span of time, it is difficult to see the performance

evaluation of all the companies listed in CNX 500 through IPO. So

the performance is evaluated only for the 25 companies.

• Financial statements is based on historical cost which is associated

with price level changes.

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2.3 RESEARCH METHODOLOGY

The word “method” simply means the mode or way of accomplishing

an end. The modern world is a very fond of scientific inventions and wants

to have outlook of everything. Any scientific approach should have a

method or an outline to be followed to attain specific goals. There is no

discipline without a method so the marketing researcher has to decide

about the research design, data collection method and sampling plan.

For the purpose of this study secondary data have been use.

Business research is a systematic enquiry that provides information to

guide business decisions and aimed to solve managerial problems.

Business research is of recent origin and it is largely supported by

business organizations that hope to achieve competitive advantages.

Research methodology is a way to systematically solve the

research problems. It may be understood as a science of studying how

research is done scientifically. It includes the overall research design, the

sampling procedure, data collection method and analysis procedure.

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2.3.1 RESEARCH DESIGN

The research design stands for advance planning of the methods to

be adopted for collecting the relevant data and the techniques to be used

in analysis, keeping the view the objectives of the research and analysis

procedure.

In general, research design is the conceptual structure within

which research is conducted ; it constitutes the blue print for the collection,

measurement and analysis of data.

2.3.1.1 DESCRIPTIVE RESEARCH

Descriptive research study includes surveys and fact-findings

enquiries of different kinds, which help the researchers to describe the

present situation that makes the analysis about the employees work life

balance and helps to reach the objectives.

2.3.2 SAMPLING DESIGN/TECHNIQUES

The CNX 500 has 500 companies in NSE is the total population. The

researcher has selected 25 companies as his sample for the study.

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SAMPLE LIST

S.NO COMPANIES
1 National Aluminium Company Ltd
2 Hero Honda Motors Ltd
3 Tata motors Ltd
4 State Bank Of India
5 Grasim Industries Ltd
6 Infosys Technologies Ltd
7 DLF Ltd
8 Hindustan Unilever Ltd
9 Bharat Heavy Electricals Ltd
10 Bharat Electronics Ltd
11 Larsen & Toubro Ltd
12 Housing Development Finance Corporation Ltd
13 Sun tv Network Ltd
14 Sterlite Industries (India) Ltd
15 Sesa Goa Ltd
16 Pantaloon Retail (India) Ltd
17 Oil & Natural Gas Corporation Ltd
18 Tamil Nadu Newsprint And Papers Ltd
19 Castrol India Ltd
20 NTPC Ltd
21 Reliance Industries Ltd
22 Shree Renuka Sugars Ltd
23 Tata Tea Ltd
24 Reliance Communications Ltd
25 Tata Steel Ltd

32
33
2.3.3 NATURE OF DATA COLLECTION

The present study used as secondary data.

Secondary data

The secondary data were collected for the study from Websites,

books, leading journals and magazines were referred for this purpose from

the library to facilitate proper understanding of the study.

2.4. TIME PERIOD COVERED

The data of 5 years i.e., from accounting year 2004 – 2008 were

collected and used for the study.

2.5. STATISTICAL TOOLS

The statistical tool used in this project is Wilcoxon signed rank

test. Since the parameters taken for the study does not fulfill the

requirements of normality and homogeneity to conduct T-Test so

Wilcoxon signed rank test was used.

2.6 SAMPLE SIZE

The number of companies which issued IPO and got listed in

S&P CNX 500 during the year 2006 was 25 and all the 25 companies

were taken for the study. So the sample size chosen for this study is 25

companies.

34
 CHAPTER – III

DATA ANALYSIS AND INTERPRETATION

OVER ALL PERFORMANCE ANALYSIS

To analyze the over all performance of the company issued IPO the

following parameters were taken into consideration.

Table. No. 3.1

S.NO PERFORMANCE COMPONENTS

PARAMETER
1 Profitability Operating profit margin
Gross profit margin
Net profit margin
Return on net worth
Return on long term funds
2 Liquidity Current ratio
Quick ratio
Inventory turnover ratio
3 Leverage Long term debt equity ratio
Fixed assets turnover ratio
Earning retention ratio

Each component was observed individually by comparing the pre

and post IPO period by conducting Wilcoxon signed rank test

35
WILCOXON SINNED RANK TEST FOR OVERALL PERFROMANCE

a) OPERATING PROFIT MARGIN

Table No. 3.2.1

In percentage
PRE IPO POST IPO
S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 47.48 54.38 51.08 61.06 47.28 54.17
2 17.17 15.96 16.57 12.13 13.22 12.68
3 13.25 11.62 12.44 9.70 10.44 10.07
4 21.42 17.33 19.38 19.29 19.50 19.40
5 24.68 25.89 25.29 27.54 30.11 28.83
6 33.91 33.11 33.51 31.72 34.09 32.91
7 12.16 16.28 14.22 59.76 55.88 57.82
8 15.32 14.14 14.73 14.95 14.46 14.71
9 10.62 13.52 12.07 20.41 18.97 19.69
10 19.32 21.71 20.54 24.55 25.06 24.81
11 7.59 7.66 7.63 11.52 12.98 12.25
12 95.32 95.21 95.27 95.98 96.46 96.22
13 46.13 45.06 45.60 56.02 72.22 64.12
14 10.41 5.80 8.11 9.20 6.67 7.94
15 28.44 57.79 43.12 57.74 69.92 63.83
16 8.11 7.79 7.95 6.42 8.75 7.59
17 53.04 50.96 52.00 49.47 49.51 49.49
18 21.08 14.69 17.89 22.42 25.22 23.82
19 15.90 14.55 15.23 17.52 18.60 18.06
20 27.56 32.30 29.93 31.13 31.19 31.16
21 18.54 19.28 18.91 18.26 16.76 17.51
22 13.35 10.54 11.95 14.54 13.31 13.93
23 11.27 14.95 13.11 17.54 13.93 15.74
24 0 0 0 43.21 41.73 42.47
25 32.47 41.10 36.79 39.61 41.94 40.78
Source: secondary data.

36
FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO operating profit.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO operating profit.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.2

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
8 3.00 6.00
Positive Ranks 17 b 7.73 85.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

37
 Table No. 3.2.3

Test Statistics b

POST IPO
- PRE IPO
Z -2.760 a
Asymp. Sig. (2-tailed) .006
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 8 negative ranks and 17 positive

ranks and this indicates that that the operating profit in post IPO period is

higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO operating profit.

38
b) GROSS PROFIT MARGIN

Table No. 3.2.4

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 34.32 43.67 39.00 56.00 41.82 48.91
2 15.91 14.76 15.34 10.72 11.67 11.20
3 10.32 9.01 9.67 7.50 8.17 7.84
4 19.36 15.41 34.77 18.09 18.48 18.29
5 19.46 21.32 20.39 23.86 26.66 25.26
6 30.00 28.58 29.29 28.23 30.66 29.45
7 11.59 15.45 13.52 58.91 55.41 57.16
8 14.12 13.03 13.58 13.96 13.50 13.73
9 8.16 11.25 9.71 19.00 17.65 18.33
10 17.05 19.47 18.26 22.38 22.78 22.58
11 6.72 7.00 6.86 10.61 12.19 11.40
12 94.55 94.46 94.61 95.69 96.26 95.98
13 46.13 39.80 42.97 54.46 59.09 56.78
14 6.87 2.94 4.91 8.08 5.58 6.83
15 25.97 56.08 41.03 56.19 68.73 62.46
16 6.77 6.56 6.67 5.33 7.17 6.25
17 47.45 47.00 47.23 43.69 42.99 43.34
18 10.85 6.06 8.46 14.97 17.58 16.28
19 14.05 13.26 13.66 16.42 17.45 16.94
20 16.84 23.62 20.23 24.77 25.43 25.10
21 12.11 13.54 12.83 13.95 13.14 13.55
22 10.43 9.34 9.89 11.42 11.24 11.33
23 8.41 12.47 10.44 15.78 13.04 14.41
24 0 0 0 28.82 29.26 29.04
25 26.63 36.83 31.73 34.91 37.70 36.31
Source: secondary data.

39
FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO gross profit.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO gross profit.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.5

Ranks
N Mean Rank Sum of Ranks
POST IPO - PRE IPONegative Ranks 5a 4.00 8.00
Positive Ranks 20b 7.55 83.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

40
Table No. 3.2.6

Test Statistics b

POST IPO
- PRE IPO
Z -2.760 a
Asymp. Sig. (2-tailed) .009
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 5 negative ranks and 20 positive

ranks and this indicates that that the gross profit in post IPO period is

higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO gross profit.

41
c) NET PROFIT MARGIN

Table No. 3.2.7

In Percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 22.31 28.28 25.30 37.47 29.27 33.37
2 12.36 10.85 11.61 8.58 9.27 8.93
3 6.10 7.02 6.56 6.94 6.96 6.95
4 14.46 13.90 14.18 17.44 12.03 18.51
5 14.46 13.90 14.18 17.44 19.57 18.51
6 27.28 26.17 26.73 27.37 27.52 27.45
7 7.16 14.13 10.65 28.38 42.49 35.44
8 11.68 12.42 12.05 12.58 12.05 12.32
9 7.91 9.58 8.75 13.51 13.87 13.69
10 11.20 13.58 12.39 17.61 19.35 18.48
11 5.33 7.33 6.33 7.74 8.54 8.14
12 27.67 30.39 29.03 26.63 29.72 28.18
13 27.84 25.52 26.68 37.02 39.93 38.48
14 6.38 2.61 4.50 6.57 7.17 6.87
15 15.08 30.54 22.81 29.43 40.98 35.21
16 3.01 3.54 3.28 3.53 2.36 2.95
17 26.30 27.26 26.78 25.79 25.93 25.86
18 8.72 5.24 6.98 9.48 11.26 10.37
19 9.37 9.92 9.65 11.37 11.67 11.52
20 21.04 23.20 22.12 19.39 18.51 18.95
21 9.79 11.25 10.52 10.64 14.45 12.55
22 5.02 6.09 5.56 6.72 5.27 6.00
23 10.88 13.50 12.19 26.80 24.59 25.70
24 0 42.64 21.32 18.63 17.45 18.04
25 16.00 23.72 19.86 23.53 23.43 23.48
Source: secondary data.

42
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO net profit.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO net profit.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3 .2.8

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
6 6.50 26.00
Positive Ranks 19 b 7.22 66.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

43
Table No. 3.2.9

Test Statistics b

POST IPO
- PRE IPO
Z -1.363 a
Asymp. Sig. (2-tailed) .173
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 6 negative ranks and 19 positive

ranks and this indicates that that the operating profit in post IPO period is

higher than the pre IPO period.

44
d) RETURN ON NET WORTH

Table No. 3.2.10

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 18.96 26.01 22.49 31.19 18.68 24.94
2 53.92 47.76 50.84 30.11 28.14 29.13
3 22.98 30.12 26.55 24.67 21.18 22.93
4 19.35 15.93 17.64 13.70 15.74 14.72
5 20.08 20.96 20.52 22.83 23.10 22.97
6 35.29 36.21 35.75 33.09 34.76 33.93
7 7.76 17.78 16.65 62.17 22.84 42.51
8 55.25 55.75 55.50 116.49 116.82 116.66
9 9.97 11.53 10.75 27.86 27.07 27.47
10 31.12 28.75 29.94 27.41 23.44 25.43
11 17.79 17.33 17.56 24.39 21.21 22.80
12 25.41 27.08 26.25 28.31 14.79 21.55
13 23.75 19.00 21.38 23.08 24.47 23.78
14 7.51 3.13 5.32 16.66 7.40 12.03
15 31.09 62.50 46.80 39.99 52.35 46.17
16 22.29 15.44 18.87 2.61 7.84 5.23
17 21.50 27.91 24.71 27.40 23.17 25.29
18 11.18 7.08 9.13 14.94 17.58 16.26
19 36.22 35.47 35.85 50.66 55.82 53.24
20 11.88 12.57 12.23 13.61 13.99 13.80
21 14.27 19.42 16.85 19.85 17.28 18.57
22 40.53 64.17 52.35 15.56 12.20 13.88
23 9.18 13.15 11.17 10.97 8.30 9.64
24 0 0.03 0.05 11.43 8.43 9.93
25 43.76 50.27 47.02 31.19 20.42 25.81
Source: secondary data.

45
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO return on networth profit.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO return on networth profit.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.11

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
11 33.00 33.00
Positive Ranks 14 b 7.00 42.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

46
Table NO. 3.2.12

Test Statistics b

POST IPO
- PRE IPO
Z -.245 a
Asymp. Sig. (2-tailed) .806
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 11 negative ranks and 14

positive ranks and this indicates that that the return on networth in post

IPO period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO in return on networth.

47
e) RETURN ON LONG TERM FUNDS

Table No. 3.2.13

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 26.31 41.27 33.79 47.95 29.08 38.52
2 74.70 67.12 70.91 43.48 41.57 42.53
3 32.21 28.72 30.47 31.18 22.73 26.96
4 105.35 97.89 101.62 86.83 100.35 93.59
5 22.11 24.22 23.17 25.35 27.83 26.59
6 41.52 40.62 41.07 37.77 39.80 38.79
7 5.64 13.32 9.48 15.35 22.40 18.88
8 47.07 69.33 58.20 147.26 145.85 146.56
9 16.03 21.22 18.63 42.84 41.56 42.20
10 42.65 44.46 43.56 40.44 34.89 37.67
11 27.61 24.93 26.27 32.59 28.73 30.66
12 9.65 8.43 9.04 9.38 9.98 9.68
13 40.44 31.00 35.72 35.12 38.54 36.83
14 7.88 4.08 5.98 20.09 9.59 14.84
15 44.02 115.34 79.68 78.10 90.41 84.26
16 17.13 17.87 17.50 9.50 13.36 11.43
17 33.43 42.04 37.74 37.26 36.30 36.78
18 13.49 8.57 11.03 13.92 18.14 16.03
19 55.29 53.21 54.25 79.38 87.22 83.30
20 18.04 13.15 15.60 14.69 15.25 14.97
21 14.99 19.44 17.22 19.83 17.18 18.51
22 29.42 52.39 40.91 12.82 14.48 13.65
23 11.70 14.76 13.23 15.16 13.15 14.16
24 0 0.03 0.02 11.73 10.41 11.07
25 39.43 56.78 48.11 28.11 17.16 22.64
Source: secondary data.

48
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO return on long term funds.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO return on long term funds.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.14

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
10 8.13 65.00
Positive Ranks 15 b 5.20 26.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

49
Table NO. 3.2.15

Test Statistics b

POST IPO
- PRE IPO
Z -1.363 a
Asymp. Sig. (2-tailed) .173
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 10 negative ranks and 15

positive ranks and this indicates that that the return on long term funds in

post IPO period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO return on long term

funds.

50
f) CURRENT RATIO

Table No. 3.2.16

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 0.68 1.23 0.96 2.65 2.31 2.48
2 0.37 0.34 0.36 0.56 0.48 0.52
3 0.69 0.98 0.84 0.85 0.64 0.75
4 0.04 0.05 0.05 0.07 0.04 0.06
5 0.75 0.86 0.81 0.85 0.73 0.79
6 2.80 2.75 2.78 3.30 4.71 4.01
7 2.31 1.21 1.76 1.75 2.34 2.05
8 0.88 0.69 0.79 0.67 0.92 0.80
9 1.71 1.63 1.67 1.43 1.38 1.41
10 1.33 1.44 1.39 1.64 1.73 1.69
11 1.20 1.34 1.27 1.16 1.09 1.13
12 7.19 8.26 7.73 10.37 14.12 12.25
13 7.39 2.34 4.87 6.08 3.83 4.96
14 0.68 0.92 0.80 1.15 0.80 0.98
15 1.77 1.45 1.61 1.82 1.95 1.89
16 0.96 1.16 1.06 1.84 1.14 1.49
17 1.73 1.40 1.57 1.40 1.56 1.48
18 0.53 0.64 0.59 0.68 0.53 0.61
19 1.27 1.42 1.35 1.55 1.69 1.62
20 1.59 1.72 1.66 2.42 2.32 2.37
21 0.98 1.07 1.03 0.77 0.97 0.87
22 0.80 0.93 0.87 0.69 0.89 0.79
23 1.09 1.03 1.06 0.37 0.71 0.54
24 0 742.81 371.41 1.77 0.95 1.36
25 0.65 0.69 0.67 1.69 3.81 2.75
Source: secondary data.

51
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO current ratio.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO current ratio.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.17

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
9 9.00 18.00
Positive Ranks 16 b 5.56 50.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

52
Table No. 3.2.18

Test Statistics b

POST IPO
- PRE IPO
Z -.314 a
Asymp. Sig. (2-tailed) .753
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 9 negative ranks and 16 positive

ranks and this indicates that that the current ratio in post IPO period is

higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO current ratio.

53
g) QUICK RATIO

Table No. 3.2.19

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 0.33 0.84 0.59 2.28 1.97 2.13
2 0.23 0.21 5.72 0.39 0.31 0.35
3 0.47 0.76 0.62 0.91 0.66 0.79
4 4.79 5.50 5.15 6.15 5.74 7.74
5 0.64 0.67 0.66 0.73 0.70 0.72
6 2.77 2.73 2.75 3.28 4.67 3.98
7 1.03 0.73 0.88 1.36 3.28 2.64
8 0.47 0.32 0.40 0.24 0.51 0.38
9 1.28 1.22 1.25 1.13 1.09 1.11
10 0.93 0.98 0.96 1.19 1.31 1.35
11 1.03 1.12 1.08 0.93 0.86 0.90
12 16.78 19.27 18.03 21.36 22.84 22.10
13 7.33 6.95 7.17 6.98 3.78 4.88
14 0.99 1.72 1.36 1.42 1.02 1.22
15 1.45 0.76 1.11 0.93 1.27 1.10
16 0.86 0.80 0.83 2.07 1.64 1.86
17 1.77 1.33 1.55 1.28 1.39 1.34
18 0.52 0.64 0.58 0.50 0.45 0.48
19 0.70 0.77 0.74 1.07 1.05 5.79
20 1.30 1.44 1.37 2.18 2.12 2.15
21 0.92 0.96 0.94 0.68 0.88 0.78
22 0.69 0.57 0.63 1.45 1.15 1.30
23 0.62 0.53 0.58 0.57 1.07 0.82
24 0 742.81 371.41 1.86 1.63 1.75
25 0.39 0.33 0.36 1.37 3.52 2.45
Source: secondary data.

54
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO quick ratio.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO quick ratio.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.20

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
11 7.80 39.00
Positive Ranks 14 b 6.50 52.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

55
Table NO. 3.2.21

Test Statistics b

POST IPO
- PRE IPO
Z -0.454 a
Asymp. Sig. (2-tailed) .650
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 11 negative ranks and 14

positive ranks and this indicates that that the quick ratio in post IPO period

is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO quick ratio.

56
h) INVENTORY TURNOVER RATIO

Table No. 3.2.22

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 15.21 17.20 16.21 17.13 13.47 15.30
2 41.05 47.59 44.32 47.48 42.82 45.15
3 14.91 14.06 14.49 13.26 14.43 13.85
4 0 0 0 0 0 0
5 21.80 15.54 18.67 17.75 19.40 18.58
6 0 0 0 0 0 0
7 0.64 1.29 0.97 0.33 0 0.17
8 8.23 9.97 9.10 8.20 9.26 8.73
9 4.41 3.79 4.10 4.64 3.88 4.26
10 2.81 2.92 2.87 3.06 2.94 3.00
11 5.57 5.92 5.75 6.11 6.00 6.06
12 0 0 0 0 0 0
13 2477.09 1209.63 1843.36 66.43 0 33.22
14 9.36 7.77 8.57 6.84 5.94 6.39
15 14.81 11.21 13.01 8.95 15.38 12.17
16 4.20 3.96 4.08 3.91 3.75 3.83
17 207.55 248.60 228.08 150.64 122.77 136.71
18 8.37 11.12 9.75 10.44 12.73 11.59
19 9.86 8.22 9.04 10.16 9.75 9.96
20 38.27 43.42 40.85 30.50 33.59 32.05
21 8.80 10.87 9.84 10.65 10.57 10.61
22 5.76 6.62 6.19 10.39 12.77 11.58
23 8.18 6.09 7.14 6.69 6.43 6.56
24 0 0 0 0 0 0
25 12.91 10.42 11.67 10.81 10.84 10.83
Source: secondary data.

57
FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO inventory turnover ratio.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO inventory turnover ratio

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.23

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
13 6.29 44.00
Positive Ranks b
8 3.67 11.00
Ties 4c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

58
Table No. 3.2.24

Test Statistics b

POST IPO
- PRE IPO
Z -1.682 a
Asymp. Sig. (2-tailed) .093
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 13 negative ranks and 8 positive

ranks and this indicates that that the inventory turnover ratio in post IPO

period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO inventory turnover

ratio.

59
I) LONG TERM DEBT EQUITY RATIO

Table No. 3.2.25

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 0.17 0 0.09 0 0 0
2 0.15 0.13 0.14 0.06 0.04 0.05
3 0.32 0.59 0.46 0.31 0.50 0.41
4 0 0 0 0 0 0
5 0.47 0.39 0.43 0.40 0.30 0.35
6 0 0 0 0 0 0
7 1.23 1.55 1.39 8.74 0.41 4.58
8 0.63 0 0.32 0 0 0
9 0.10 0.08 0.09 0.01 0.01 0.01
10 0.02 0.01 0.02 0 0 0
11 0.30 0.38 0.34 0.24 0.27 0.26
12 7.88 3.87 8.38 9.84 5.62 7.73
13 0 0 0 0 0 0
14 1.05 0.33 0.69 0.17 0.02 0.10
15 0.23 0.02 0.13 0 0 0
16 1.81 0.90 1.36 0.78 0.72 0.75
17 0.20 0.17 0.19 0.23 0.17 0.20
18 0.35 0.26 0.31 0.80 0.61 0.71
19 0.01 0.01 0.01 0.01 0.01 0.01
20 0.43 0.41 0.42 0.51 0.54 0.53
21 0.49 0.40 0.45 0.32 0.35 0.34
22 1.96 0.93 1.45 1.43 1.22 1.33
23 0.20 0.17 0.19 0.10 0.21 0.16
24 0 0 0 0.67 0.48 0.58
25 0.72 0.37 0.55 0.67 1.07 0.87
Source: secondary data.

60
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO long term debt equity ratio.

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO long term debt equity ratio.

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.26

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
15 30.00 30.00
Positive Ranks 6 b 7.73 82.00
Ties 4c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

61
Table No. 3.2.27

Test Statistics b

POST IPO
- PRE IPO
Z -0.936 a
Asymp. Sig. (2-tailed) .003
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 15 negative ranks and 6 positive

ranks and 4 ties and this indicates that that the long term debt equity ratio

in post IPO period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO long term debt equity

ratio.

62
j) FIXED ASSETS TURNOVER RATIO

Table No. 3.2.28

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 0.40 0.49 0.45 0.67 0.56 0.62
2 6.65 7.11 6.88 6.01 5.89 5.95
3 2.18 2.62 2.40 3.08 2.68 2.88
4 5.45 5.10 5.28 6.32 7.20 6.76
5 0.91 1.06 0.99 1.28 1.35 1.32
6 3.20 3.18 3.19 3.47 3.39 3.43
7 5.93 4.18 5.06 3.01 3.60 3.31
8 4.69 5.11 4.90 5.64 7.81 6.73
9 2.33 2.67 2.50 4.27 4.48 4.38
10 2.63 2.83 2.73 2.96 2.86 2.91
11 4.77 6.32 5.55 6.21 6.09 6.15
12 4.18 6.02 5.10 11.98 16.83 14.41
13 1.70 1.62 1.66 2.35 1.95 4.30
14 1.44 1.74 1.59 4.40 4.58 4.49
15 2.22 3.39 2.81 3.38 5.60 4.49
16 3.55 4.32 3.94 4.42 3.87 4.15
17 0.77 1.08 0.93 1.10 1.05 1.08
18 0.35 0.26 0.31 0.80 0.61 0.71
19 5.40 5.89 5.65 7.58 8.36 7.97
20 0.47 0.52 0.50 0.64 0.69 0.67
21 0.97 1.20 1.09 1.13 1.29 1.21
22 1.98 4.75 3.37 1.26 2.26 1.76
23 1.49 1.70 1.60 2.44 6.65 4.55
24 0 0 0 0.69 0.77 0.73
25 0.85 1.11 0.98 1.09 1.20 1.15
Source: secondary data.

63
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO fixed assets turnover ratio

Alternative Hypothesis (H1): There is a significant difference between

the pre and post IPO fixed assets turnover ratio .

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

64
 Table No. 3.2.29

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
3 3.00 41.00
Positive Ranks 22 b 6.25 50.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

65
Table No. 3.2.30

Test Statistics b

POST IPO
- PRE IPO
Z -.315 a
Asymp. Sig. (2-tailed) .753
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 3 negative ranks and 22 positive

ranks and this indicates that that the fixed assets turnover ratio in post IPO

period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO fixed assets turnover

ratio.

66
k) EARNING RETENTION RATIO

Table No. 3.2.31

In percentage

PRE IPO POST IPO

S.NO 2004 2005 AVERAGE 2007 2008 AVERAGE
1 59.20 76.01 67.61 76.85 72.73 74.79
2 26.64 36.09 31.37 46.62 47.19 46.91
3 61.20 58.18 59.69 59.90 60.13 60.02
4 83.88 80.93 82.41 77.33 77.11 77.22
5 80.01 81.52 80.77 79.78 83.17 81.48
6 80.98 43.48 62.23 50.17 74.60 62.39
7 100.00 97.68 98.84 1.72 69.01 35.37
8 -7.80 1.94 -2.93 -39.13 20.58 -9.28
9 68.51 68.01 68.26 71.73 70.07 70.90
10 76.65 77.68 77.17 76.42 74.45 75.44
11 53.21 28.89 41.05 69.85 71.72 70.79
12 56.46 54.09 55.28 58.57 53.02 55.80
13 100.00 100.00 100.00 74.63 67.99 71.31
14 77.19 66.30 71.75 65.72 65.97 65.85
15 77.19 77.70 77.45 69.72 85.82 77.77
16 84.60 81.40 83.00 69.12 91.08 80.10
17 55.12 49.88 52.50 54.59 50.60 52.60
18 57.17 33.86 45.52 62.75 67.62 65.19
19 11.49 15.57 13.53 6.25 18.27 12.26
20 71.41 57.23 64.32 54.23 54.17 54.20
21 81.79 83.72 82.76 86.50 86.01 86.26
22 87.50 86.68 87.09 87.42 90.73 89.03
23 38.45 50.80 44.63 33.97 -72.73 -38.76
24 0 10.00 5.00 94.91 91.36 93.14
25 78.19 76.14 77.17 74.25 69.02 71.64
Source: secondary data.

67
 FORMULATION OF HYPOTHESIS

Null Hypothesis (Ho): There is no significant difference between the pre

and post IPO earning retention ratio.

Alternative Hypothesis (Ho): There is a significant difference between

the pre and post IPO earning retention ratio

Level of significance

Here for this study the Confidence level is taken as 95%.Thus the

level of significance is 5%.

Wilcoxon Signed Ranks Test

Table No. 3.2.32

Ranks

N Mean Rank Sum of Ranks

POST IPO - PRE IPO Negative Ranks a
11 6.33 6.00
Positive Ranks 14 b 5.88 47.00
Ties 0c
Total 25
a. POST IPO < PRE IPO
b. POST IPO > PRE IPO
c. PRE IPO = POST IPO

68
Table No. 3.2.33

Test Statistics b

POST IPO
- PRE IPO
Z -1.215 a
Asymp. Sig. (2-tailed) .213
a. Based on negative ranks.
b. Wilcoxon Signed Ranks Test

INTREPRETATION

The result indicates that there are 11 negative ranks and 14

positive ranks and this indicates that that the earning retention ratio in post

IPO period is higher than the pre IPO period.

The test statistic 0.006 is lesser than the level of significance

0.05.Thus we need to accept the alternate hypothesis (i.e.) there is a

significant difference between the pre and post IPO earning retention ratio.

3.3. BETA ANALYSIS

The beta is the true measure of volatility of share price. The share

price movement of the sample companies’ was tracked from the National

Stock Exchange Website for the post IPO period. Then the beta was

calculated for all the companies as shown below.

69
 TREND OF BETA

Table. No. 3.3.1

TREND OF
S.NO COMPANY 2007 2008
BETA
1 National Aluminium Company Limited 1.35 1.24 -
2 Hero Honda Motors Limited 1.42 1.23 -
3 Tata Motors Ltd 1.31 1.79 +
4 State Bank Of India 1.32 1.00 -
5 Grasim Industries Limited 2.68 1.62 -
6 Infosys Technologies Limited 1.24 1.83 +
7 DLF Limited 1.16 0.61 -
8 Hindustan Unilever Limited 0.71 1.00 +
9 Bharat Heavy Electricals Limited 2.68 0.63 -
10 Bharat Electronics Limited 0.95 1.17 +
11 Larsen & Toubro Limited 1.32 1.20 -
12 Housing Development Finance 1.05 0.57 -
Corporation Limited
13 Sun Tv Network Limited 0.93 1.17 +
14 Sterlite Industries Limited 0.85 1.10 +
15 Sesa Goa Limited 0.92 1.12 +
16 Pantaloon retail (India) Limited 0.48 1.18 +
17 Oil & Natural Gas Corporation Limited 1.16 0.52 -
18 Tamil Nadu Newsprint & Papers 0.89 1.34 +
Limited
19 Castrol India Limited 0.70 0.88 +
20 NTPC Limited 1.40 1.02 -
21 Reliance Industries Limited 1.64 1.98 +
22 Shree Renuka Sugars Limited 1.49 2.84 +
23 Tata Tea Limited 1.40 2.84 +
24 Reliance Communications Limited 0.69 0.45 -
25 Tata Steel Limited 1.55 1.78 +

Source: secondary data.

70
CHART SHOWING BETA VALUES OF THE SAMPLE COMPANIES

FIGURE 3.3.1

TREND OF BETA

3
2.5
2
YEAR

Series1
1.5
1 Series2
0.5
0
Bharat Heavy

Tamil Nadu

NTPC Limited
Tata Motors

DLF Limited

Sterlite

Reliance
Shree Renuka
Grasim
National

Pantaloon retail
Larsen &

COMPANY NAME

INTERPRETATION

 In the year 2008, the companies like Hero Honda Motors Ltd,

Infosys Technologies Ltd, Hindustan Unilever Ltd, Bharat

electronics ltd, Sun TV Network Ltd, Sesa Goa Ltd, Pantaloon

retail (India) Ltd, Tamilnadu Newsprint and Papers Ltd, Castrol

India Ltd, Reliance industries Ltd, Shree Renuga Sugars Ltd,

Tata tea Ltd, Tata Steel Ltd are tend to be more volatile since

the beta values has been increased hence the risk involved is

found to be high in these companies.

71
 And the beta value for the companies like National Aluminium

Company Ltd, Hero Honda Motors Ltd, State Bank Of India,

Grasim Industries Ltd, DLF Ltd, Bharat Heavy Electricals Ltd,

Larsen & Toubro Ltd, Housing Development Finance

Corporation Of India Ltd, Oil & Natural Gas Corporation Ltd,

NTPC Ltd, Reliance Communications Ltd, has been decreased

in the second year and tend to be less volatile when compared

to the above mentioned companies

72
3.4 ANALYSIS OF SECURITY RETURN TO THE SHARE HOLDERS

1. NATIONAL ALUMINIUM COMPANY LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
214.10 230.20 7.519851 492.80 429.20 -12.905844
230.95 209.65 -9.222775 426.15 463.40 8.741054
211.55 233.15 10.210352 460.90 451.70 -1.996095
233.00 244.05 4.742489 453.00 449.25 -0.827815
242.55 251.00 3.483818 458.00 533.90 16.572052
249.55 259.00 3.786816 538.00 349.55 -35.027881
263.70 263.00 -0.265453 350.00 424.55 21.30
261.50 259.15 -0.898662 424.00 387.70 -8.561321
259.20 301.70 16.396605 385.00 368.60 -4.259740
309.00 322.60 4.401294 379.00 159.70 -57.862796
326.00 366.35 12.377300 167.90 173.15 3.1268612
370.00 492.15 33.013514 175.90 189.85 7.930642
AVERAGE 7.128762 AVERAGE -5.314240

TABLE NO. 3.4.1

73
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.1

CHART SHOWING SECURITY RETURN TO THE

SHAREHOLDERS

40
20
0
2008

-20 492.80 460.90 458.00 350.00 385.00 167.90 Series1

-40
-60
-80
2007

74
2. HERO HONDA MOTORS LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
760.00 717.70 -5.565789 698.00 676.95 -3.015759
715.55 675.60 -5.583117 677.00 764.45 12.917282
674.90 685.15 1.518744 762.00 690.20 -9.422572
661.05 683.60 3.411240 705.50 850.70 20.581148
700.00 732.35 0.000462 857.00 746.70 -12.870478
730.00 688.90 -5.630137 765.00 682.80 -10.745098
692.00 673.65 -2.651734 690.00 804.65 16.615942
665.50 648.60 -2.539444 790.00 828.80 4.911392
660.00 744.80 12.848485 821.00 868.90 5.834348
742.20 726.85 -2.068176 875.00 748.30 -14.48
725.00 722.70 -0.317241 769.00 800.80 4.135241
727.75 697.65 -4.136035 795.00 805.10 1.270440

AVERAGE -0.89273 AVERAGE 1.310991

TABLE NO. 3.4.2

75
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.2

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

30

20

10
IN RS.

Series1
0 Series2
1 2 3 4 5 6 7 8 9 10 11 12
-10

-20
SECURITY RETURN

76
3. TATA MOTORS LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
900.90 877.75 -0.256965 742.50 706.15 -4.895623
885.00 783.95 -11.418079 712.50 700.25 -1.719298
791.15 727.75 -8.013651 696.00 623.45 -10.423851
700.00 750.45 7.207143 626.00 662.20 5.782747
753.95 757.50 0.470853 670.00 576.90 -13.895522
754.70 669.75 -11.256129 582.00 426.50 -26.71821
670.00 699.30 4.373134 420.00 403.25 -3.988095
694.80 701.85 1.014680 395.00 440.35 11.481013
706.00 778.15 10.219546 450.00 344.20 -23.511111
787.00 757.70 -3.722999 350.00 171.80 -50.914286
778.00 733.35 -5.739075 200.00 136.35 -0.003183
744.00 742.10 -0.255376 136.00 159.05 0.735294

AVERAGE -1.44808 AVERAGE -9.83918

TABLE NO. 3.4.3

77
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.3

CHART SHOWING SECURITY RETURN TO THE

SHAREHOLDERS

20
10
0
-10 1 2 3 4 5 6 7 8 9 10 11 12
IN RS.

2007
-20
2008
-30
-40
-50
-60
SECURITY RETURN

78
4. STATE BANK OF INDIA

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100

1,247.00 1,138.05 8.73696 2,381.00 2,162.25 -9.187316

1,140.00 1,039.15 -8.846491 2,186.00 2,109.70 -3.490393
1,039.00 992.90 -4.436959 2,089.00 1,598.85 -23.463380
958.65 1,105.25 15.292339 1,611.00 1,776.35 10.263811
1,125.00 1,352.40 20.213333 1,796.00 1,443.35 -19.635300
1,365.00 1,525.30 11.743590 1,450.00 1,111.45 -23.348276
1,531.85 1,624.50 6.048242 1,120.00 1,414.75 26.316964
1,610.00 1,599.50 -0.652174 1,396.00 1,403.60 0.544413
1,614.50 1,950.70 20.823784 1,376.00 1,465.65 6.515262
1,984.00 2,068.15 4.241431 1,480.00 1,109.50 -25.033783
2,100.00 2,300.30 9.538095 1,155.00 1,086.85 -5.900433
2,330.00 2,371.00 1.759656 1,095.00 1,288.25 17.648402

AVERAGE 5.582323 AVERAGE -4.06417

TABLE NO. 3.4.4

79
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.4

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

30
20
10
IN RS.

2007
0
2008
-10 1 2 3 4 5 6 7 8 9 10 11 12

-20
-30
SECURITY RETURN

80
5. GRASIM INDUSTRIES LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100

2,800.00 2,778.55 0.766074 3,625.00 2,948.75 0.027586

2,784.90 2,212.60 -20.550109 2,960.00 2,888.45 -2.417230
2,223.30 2,091.25 0.0423067 2,867.00 2,574.70 -10.195326
2,025.00 2,442.35 20.609877 2,599.00 2,402.75 -7.550981
2,459.00 2,501.80 1.740545 2,439.00 2,220.30 -8.966790
2,509.00 2,637.95 5.139498 2,225.00 1,846.45 -17.01348
2,635.00 2,957.60 12.242884 1,822.05 1,800.45 -1.185478
2,917.00 2,935.60 0.637641 1,780.00 1,937.45 8.845506
2,935.00 3,513.45 19.708688 1,912.15 1,687.60 -11.843326
3,545.00 3,704.05 4.486600 1,712.00 1,026.25 -40.055491
3,725.00 3,792.95 1.824161 1,055.50 889.25 -15.750828
3,800.00 3,651.60 -3.905263 890.00 1,217.95 36.848315
AVERAGE 3.43423 AVERAGE -5.77146

TABLE NO. 3.4.5

81
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.5

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

60
40
20
IN RS.

2007
0
2008
-20 1 2 3 4 5 6 7 8 9 10 11 12

-40
-60
SECURITY RETURN

82
6. INFOSYS TECHNOLOGIES LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-X1)/X1]
*100
2,242.00 2,244.45 0.10927 1,758.00 1,503.90 14.45392
2,244.45 2,078.35 -7.400477 1,515.00 1,546.85 2.1023
2,100.00 2,012.60 -4.161904 1,530.00 1,430.15 -6.52614
2,000.00 2,049.35 2.4675 1,450.00 1,753.75 20.948
2,080.00 1,920.25 -7.68029 1,794.00 1,957.55 9.11650
1,935.00 1,929.20 -0.29974 1,956.00 1,734.75 -11.3113
1,935.00 1,977.25 2.18346 1,739.90 1,583.30 -9.00052
1,965.00 1,855.05 -5.59542 1,551.00 1,748.50 12.7337
1,875.00 1,896.75 1.16 1,760.00 1,397.55 -20.594
1,900.00 1,839.10 -3.20526 1,425.00 1,381.65 -3.0421
1,849.00 1,604.05 0.05408 1,413.00 1,240.60 -12.2010
1,616.00 1,768.40 9.43070 1,300.00 1,117.85 -14.0115

AVERAGE -1.07817 AVERAGE -1.44435

TABLE NO. 3.4.6

83
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.6

CHART SHOWING SECURITY RETURN TO THE

SHAREHOLDERS

30
20
10
IN RS.

2007
0
2008
-10 1 2 3 4 5 6 7 8 9 10 11 12

-20
-30
SECURITY RETURN

84
7. DLF LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
0 0 0 1,051.10 812.55 -0.02160
0 0 0 870.00 780.55 -10.2816
0 0 0 761.00 646.50 -15.046
0 0 0 650.00 705.25 8.5
0 0 0 721.00 587.45 -18.52288
0 0 0 595.00 396.20 -33.4118
582.00 611.70 5.0172 398.00 509.30 27.9648
605.00 598.25 -1.1157 495.00 493.30 -0.34343
602.10 762.95 26.715 487.00 352.40 -27.639
770.00 948.80 23.221 352.40 220.25 -37.5
955.80 943.90 -1.24503 230.00 198.25 -13.80435
952.70 1,073.80 12.711 200.00 281.90 40.95

AVERAGE 5.441956 AVERAGE -6.59632

TABLE NO. 3.4.7

85
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.7

CHART SHOWING SECURITY RETURN TO THE

SHAREHOLDERS

30
20
10
IN RS.

2007
0
2008
-10 1 2 3 4 5 6 7 8 9 10 11 12

-20
-30
SECURITY RETURN

86
8. HINDUSTAN UNILEVER LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
218.00 208.20 -4.495413 214.20 206.50 -3.594771
211.30 176.15 -16.635116 209.40 227.35 8.572111
176.00 205.25 16.619318 226.00 228.70 1.194690
203.00 199.40 -1.773340 232.00 249.50 7.543103
201.00 203.50 1.243781 252.70 237.15 -6.153542
205.00 188.85 -7.878049 237.50 206.10 -13.221052
189.80 206.35 8.719705 205.00 239.70 16.926829
206.00 208.60 1.262136 238.00 245.40 3.109244
210.00 219.35 4.452380 244.00 251.55 3.094262
222.90 207.60 -6.8641 252.25 221.95 -12.011892
209.00 207.15 -0.88517 225.00 236.20 4.97778
208.00 213.90 2.836538 236.60 250.25 5.769231

AVERAGE -0.28311 AVERAGE 1.350499

TABLE NO. 3.4.8

87
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.8

CHART SHOWING SECURITY RETURN TO THE

SHAREHOLDERS

20

10
IN RS.

2007
0
2008
1 2 3 4 5 6 7 8 9 10 11 12
-10

-20
SECURITY RETURN

88
9. BHARAT HEAVY ELECTRICALS LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-X1)/X1]
*100
2,302.00 2,517.25 9.350565 2,585.00 2,064.10 -20.15087
2,520.00 2,176.80 -13.61904 2,070.00 2,282.00 10.24154
2,190.00 2,260.75 0.047137 2,235.00 2,056.55 -7.984340
2,275.00 2,487.25 9.329670 2,070.00 1,897.00 -8.35749
2,510.00 1,398.90 -44.2670 1,910.50 1,662.15 -13.00262
1,408.00 1,538.25 9.25071 1,675.55 1,380.60 -17.60318
1,550.00 1,731.70 11.72258 1,387.00 1,679.05 21.05624
1,710.00 1,889.15 10.47661 1,631.10 1,706.55 4.625713
1,899.00 2,032.75 7.043181 1,700.00 1,586.00 -6.705882
2,059.90 2,613.35 26.86781 1,620.00 1,281.60 -20.88889
2,680.00 2,680.25 0.009328 1,320.00 1,361.30 3.128787
2,699.00 2,584.25 -4.251575 1,354.00 1,362.40 0.620384
AVERAGE 1.829998 AVERAGE -4.58505

TABLE NO. 3.4.9

89
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.9

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40

20

0 2007
IN RS

1 2 3 4 5 6 7 8 9 10 11 12 2008
-20

-40

-60
SECURITY RETURN

90
10. BHARAT ELECTRONICS LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-X1)/X1]
*100
1,345.90 1,370.55 1.831488 2,110.00 1,559.50 -26.09005
1,371.00 1,524.50 11.19621 1,570.00 1,454.05 -7.385350
1,539.45 1,501.00 -2.497645 1,448.00 1,057.00 -27.00276
1,477.80 1,716.60 16.159156 1,124.00 1,336.55 1.890342
1,748.00 1,805.65 3.298054 1,357.75 1,165.05 -14.1926
1,839.90 1,829.85 -0.546223 1,175.05 1,015.15 -13.60793
1,840.00 1,770.10 -3.798913 1,015.00 973.15 -4.123153
1,710.00 1,696.40 -0.79532 974.00 974.00 0
1,707.95 1,839.95 7.728563 920.00 890.60 -3.195652
1,838.50 1,825.35 -0.715257 927.90 605.85 -34.70740
1,867.95 1,798.50 -3.71798 637.60 559.25 -12.28827
1,810.00 2,101.80 16.121546 564.30 751.90 33.24473

AVERAGE 3.68864 AVERAGE -8.95484108

TABLE NO. 3.4.10

91
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.10

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40

20
IN RS.

2007
0
2008
1 2 3 4 5 6 7 8 9 10 11 12
-20

-40
SECURITY RETURN

92
11. LARSEN & TOUBRO LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-
X1)/X1]
*100
1,400.00 1,587.40 13.38571 4,191.00 3,680.35 -12.1844
1,600.00 1,487.50 -7.03125 3,700.00 3,523.05 -4.782532
1,498.00 1,619.15 8.087450 3,500.00 3,024.80 -13.57714
1,599.00 1,696.40 6.091307 3,050.05 3,003.35 0.032786
1,710.00 1,998.65 16.88017 3,031.00 2,981.35 -1.63807
2,020.00 2,196.05 8.715347 3,007.00 2,183.20 -27.3961
2,190.00 2,606.50 19.01826 2,199.00 2,602.70 18.35834
2,530.60 2,582.75 2.06078 2,570.00 2,589.85 0.77237
2,650.00 2,812.60 6.135849 2,579.80 2,442.85 -5.30855
2,750.00 4,244.55 54.34727 1,248.00 805.45 -0.35461
4,300.00 4,129.00 -3.976744 835.00 726.95 -12.94012
4,179.00 4,171.85 -0.171093 730.00 774.40 0.136986
AVERAGE 10.29525 AVERAGE -4.90675

TABLE NO. 3.4.11

93
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.11

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

60

40

20 2007
IN RS

0 2008
1 2 3 4 5 6 7 8 9 10 11 12
-20

-40
SECURITY RETURN

94
12. HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

In Rs.

2007 2008

SEC SEC
0PEN CLOSE RETURN OPEN CLOSE RETURN
(X1) (X2) [(X2-X1)/X1] (X1) (X2) [(X2-X1)/X1]
*100 *100
1,615.00 1,670.75 3.450 2,925.00 2,843.50 -2.786325
1,689.00 1,501.90 -11.07756 2,850.00 2,802.70 -1.65965
1,530.00 1,520.35 -0.63072 2,764.00 2,383.75 -13.75723
1,480.00 1,659.70 12.14189 2,410.00 2,804.80 16.381742
1,690.00 1,870.80 10.69822 2,845.80 2,569.15 -9.72134
1,880.20 2,030.20 0.797787 2,580.00 1,962.40 -23.9380
2,035.00 2,016.50 -09.909091 1,964.90 2,276.70 2.518090
2,000.00 1,976.00 -1.20 2,200.00 2,343.65 6.529545
1,990.00 2,527.25 26.99749 2,310.00 2,141.15 -7.309523
2,530.00 2,773.20 9.612649 2,170.00 1,764.55 -18.68433
2,790.00 2,784.45 -0.198924 1,802.20 1,463.90 -18.77150
2,825.00 2,872.45 1.679646 1,474.50 1,487.55 0.885046

AVERAGE 3.530283 AVERAGE -5.85946

TABLE NO. 3.4.12

95
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.12

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40
30
20
IN RS.

10 2008
0 2007
-10 1 2 3 4 5 6 7 8 9 10 11 12
-20
-30
SECURITY RETURN

96
13. SUN TV NETWORK LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
1,447.00 1,688.10 16.66206 414.00 350.10 -15.4348
1,698.00 1,512.05 -10.9511 350.00 314.55 -10.1286
1,525.00 1,512.90 -0.59672 320.00 297.00 -7.1875
1,506.95 1,610.00 6.838316 304.00 318.25 4.6875
1,625.00 1,386.80 -14.6585 324.00 354.35 9.367284
1,400.00 1,595.10 13.93571 355.00 286.10 -19.4085
1,604.00 425.45 -73.4757 288.40 235.75 -18.2559
420.00 334.25 -20.4167 230.15 238.70 3.714968
320.00 336.60 5.1875 231.20 199.85 -13.5597
345.95 326.50 -5.36232 200.00 148.35 -25.825
329.25 380.70 15.62642 153.05 126.85 -17.1186
388.25 405.00 4.314231 130.00 180.50 38.84615

AVERAGE -5.241394114 AVERAGE -5.858547526

TABLE NO. 3.4.13

97
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.13

CHART SHOWING SECURITY RETURN TI

SHAREHOLDERS

100%

50%
IN RS.

2008
0%
2007
1 2 3 4 5 6 7 8 9 10 11 12
-50%

-100%
SECURITY RETURN

98
14. STERLITE INDUSTRIES (INDIA) LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-
X1)/X1]
*100
548.40 513.60 6.345733 1,045.00 750.95 -28.138756
516.00 468.95 -9.118217 765.00 837.35 9.457516
463.00 468.20 1`.123110 805.10 713.70 0.124208
465.00 520.70 11.97849 725.00 862.15 18.91724
530.00 543.75 2.59434 872.75 934.90 7.121169
551.00 585.10 6.188748 945.00 702.00 -25.71429
586.05 660.95 12.78048 695.00 631.80 -9.093525
636.00 629.45 -1.029874 620.00 627.20 1.161290
631.00 748.40 18.60538 618.00 428.45 -30.67152
755.40 1,039.00 37.543023 437.00 282.20 -35.42334
1,050.00 1,034.75 -1.452381 295.00 236.95 -19.67796
1,046.80 1,034.80 -1.146351 239.95 260.75 8.66847

AVERAGE 6.417991 AVERAGE -8.60579

TABLE NO. 3.4.14

99
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.14

CHART SHOWING SECURITY RETURN TO

SHAREHOLDERS

50
40
30
20
IN RS.

2008
10
2007
0
-10 1 2 3 4 5 6 7 8 9 10 11 12
-20
-30
SECURITY RETURN

100
15. SESA GOA LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-
X1)/X1]
*100
1,424.70 1,888.40 32.547203 3,830.10 3,030.20 -20.8846
1,910.00 1,783.35 -6.630890 3,050.00 3,464.20 13.580328
1,795.00 1,700.80 -5.247911 3,474.40 3,130.35 -9.902430
1,689.70 1,784.05 5.583831 3,105.00 4,217.40 35.82608
1,800.00 1,679.10 -6.716667 4,258.00 4,286.45 0.668154
1,689.80 1,777.70 5.205942 4,300.00 3,378.80 -21.42326
1,785.00 1,799.40 0.806723 3,370.00 3,373.10 0.091988
1,788.40 1,944.10 8.70611 3,340.25 158.25 -95.262331
1,944.00 2,524.25 29.84825 155.90 119.10 -23.604875
2,524.00 3,733.35 47.91403 120.40 80.30 -33.30565
3,800.00 3,453.35 -9.122368 84.00 74.40 -11.42857
3,490.00 3,817.75 9.391117 79.90 85.70 0.72591
AVERAGE 9.357114 AVERAGE -13.7433

TABLE NO. 3.4.15

101
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.15

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

100

50
IN RS.

2008
0
2007
1 2 3 4 5 6 7 8 9 10 11 12
-50

-100
SECURITY RETURN

102
16. PANTALOON RETAIL (INDIA) LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
596.55
411.00 464.55 13.029197 850.00 596.55 -29.81765
485.00 420.05 -13.39175 611.55 528.35 -13.60478
410.00 396.95 -3.182926 486.10 430.75 -11.386546
395.00 398.60 0.911392 434.00 479.65 10.518433
399.00 434.10 8.796992 485.00 452.45 -6.711340
436.00 495.25 13.58944 453.85 350.25 -22.8269
504.00 535.90 6.329365 341.00 347.20 1.818182
521.00 501.25 -3.790787 349.00 340.45 -2.449856
510.00 539.95 5.872549 333.60 259.60 -22.18225
550.05 608.95 10.708117 266.10 203.10 -23.67531
630.00 666.20 5.746032 209.85 202.70 -23.675310
670.00 833.55 24.41045 205.00 217.60 6.146342
AVERAGE 5.752339 AVERAGE -11.4872

TABLE NO. 3.4.16

103
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.16

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

30
20
10
IN RS.

0 2007
-10 1 2 3 4 5 6 7 8 9 10 11 12 2008
-20
-30
-40
SECURITY RETURN

104
17. OIL AND NATURAL GAS COPRORATION LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-
X1)/X1]
*100
878.00 903.40 2.892938 1,248.80 988.40 -0.016698
907.70 790.60 -12.900738 1,009.00 1,012.35 0.332012
795.00 878.15 10.45911 1,008.00 981.35 -2.64385
868.00 911.90 5.057604 998.00 1,033.40 3.547094
920.00 914.60 0.586956 1,045.00 864.30 -17.29187
919.00 902.15 -1.833515 872.00 814.70 -6.571101
910.00 914.00 0.439560 816.00 996.05 22.06495
910.00 857.55 -5.763736 990.00 1,023.30 3.363636
860.00 957.90 11.383721 1,030.00 1,035.55 0.538835
970.00 1,247.90 28.64948 1,042.00 669.80 -35.71977
1,260.00 1,170.75 -7.08333 703.60 695.35 -1.117254
1,175.00 1,236.50 5.234043 700.00 667.65 -4.621429
AVERAGE 3.09350775 AVERAGE -3.17795

TABLE NO. 3.4.17

105
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.17

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40
30
20
IN RS.

2008
10
2007
0
-10 1 2 3 4 5 6 7 8 9 10 11 12

-20
SECURITY RETURN

106
18. TAMIL NADU NEWSPRINT AND PAPERS LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
93.50 92.55 -1.016043 133.50 112.70 -2080
93.95 87.50 -6.865354 111.60 104.65 -6.2276
91.80 83.20 -9.368192 107.00 99.65 -6.869159
82.05 85.85 4.631322 100.50 105.00 4.477612
86.20 94.30 9.396752 106.65 100.10 -6.141584
99.95 100.05 0.10005 99.10 92.85 -6.30676
100.90 99.80 -1.090188 96.00 93.70 -2.39583
98.10 98.65 0.560652 93.25 91.50 -1.876676
99.70 105.30 5.616851 92.05 80.90 -12.11298
106.80 104.70 -1.966292 81.00 68.10 -15.92592
106.90 117.00 9.44808 68.20 65.45 -4.032258
120.00 132.15 10.125 64.80 65.25 0.694444

AVERAGE 1.631053 AVERAGE -178.06

TABLE NO. 3.4.18

107
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.18

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

500
0
-500 1 2 3 4 5 6 7 8 9 10 11 12
2008
IN RS

-1000
2007
-1500
-2000
-2500
SECURITY RETURN

108
19. CASTROL INDIA LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
229.80 230.55 0.326371 364.90 275.25 -24.56837
232.00 219.75 -5.280172 278.80 275.80 -0.107604
221.90 210.90 -4.957188 267.00 242.00 -9.363296
210.15 262.15 24.744230 244.00 302.95 24.15984
264.80 300.80 13.595167 305.00 301.40 -1.180328
303.00 266.10 -12.17822 304.00 259.00 -14.80263
267.90 273.45 2.071669 255.00 286.30 12.27451
274.00 260.50 -4.927007 285.00 339.95 19.28070
263.75 269.25 2.085308 339.00 342.00 0.884956
258.25 276.95 7.241045 344.00 293.30 -14.73837
279.50 269.85 -3.452594 295.00 306.25 3.813559
273.70 360.65 31.76836 305.05 335.50 9.981970

AVERAGE 4.253081 AVERAGE 0.469578

TABLE NO. 3.4.19

109
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.19

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

60

40

20
IN RS.

2008
0 2007
1 2 3 4 5 6 7 8 9 10 11 12
-20

-40
SECURITY RETURN

110
20. NTPC LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100

137.50 141.95 3.236364 254.00 197.90 -22.0866

143.00 139.95 -2.132867 200.00 201.75 0.875
140.00 149.75 6.964286 195.00 197.00 1.025641
147.90 159.20 7.640297 197.95 196.75 -0.606214
160.90 158.40 -1.553760 199.70 172.25 -13.745618
162.00 152.35 -5.956790 173.50 151.65 -12.59366
153.50 165.65 7.915309 152.00 170.45 12.13812
166.00 173.30 4.397590 169.90 175.20 3.11948
173.00 193.45 11.82081 174.95 171.75 -2.000572
195.00 239.40 22.769231 173.90 140.55 -19.17769
241.80 236.65 -2.129859 143.20 159.60 11.45251
239.85 250.05 4.252679 160.00 181.00 13.125

AVERAGE 4.7686075 AVERAGE -2.37288

TABLE NO. 3.4.20

111
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.20

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

30
20
10
IN RS.

2007
0
2008
-10 1 2 3 4 5 6 7 8 9 10 11 12

-20
-30
SECURITY RETURN

112
21. RELIANCE INDUSTRIES LIMITED

In Rs.

2007 2008

SEC RETURN SEC

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE RETURN
(X1) (X2) *100 (X1) (X2) [(X2-
X1)/X1]
*100
1,252.55 1,364.60 7.508682 2,950.00 2,479.50 -15.94915
1,365.05 1,354.60 -0.76554 2,479.00 2,458.25 -0.837031
1,385.50 1,368.35 -1.237820 2,351.00 2,264.50 .-67929
1,355.00 1,560.10 15.09406 2,284.00 2,614.85 14.4856
1,578.80 1,760.20 11.48974 2,614.00 2,401.65 -8.123573
1,760.00 1,700.30 -3.392045 2,401.00 2,093.25 -12.81758
1,699.00 1,892.30 11.37728 2,090.00 2,206.20 5.55981
1,881.00 1,959.50 4.173312 2,175.00 2,136.75 -1.758621
1,959.00 2,296.20 17.21286 2,108.35 1,946.35 -7.683734
2,296.00 2,782.55 21.19120 1,986.50 1,370.75 -30.99673
2,782.00 2,850.75 2.471243 1,412.50 1,131.60 -19.886726
2,850.00 2,881.05 1.08947 1,150.05 1,230.25 6.973609
AVERAGE 7.18437 AVERAGE -6.45765

TABLE NO. 3.4.21

113
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.21

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40
30
20
IN RS.

2008
10
2007
0
-10 1 2 3 4 5 6 7 8 9

-20
SECURITY RETURN

114
22. SHREE RENUKA SUGARS LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
447.50 333.40 -25.49721 1,013.70 881.70 -13.02160
337.95 301.90 -10.66726 879.45 1,183.20 34.5386
304.70 467.90 53.56088 1,140.00 966.80 -15.19298
462.00 438.95 -4.989178 973.55 126.60 -86.99604
442.00 585.80 32.533937 128.25 111.95 -12.70955
597.70 651.70 9.034633 1,008.65 98.55 -90.22951
660.00 624.80 -5.33333 99.00 125.20 26.46465
626.00 528.15 -15.63099 123.20 117.25 -4.829545
532.50 707.10 32.78873 116.20 102.90 -11.44578
712.80 784.30 10.0309 103.25 50.40 -51.18644
786.00 692.80 -11.85751 52.40 50.40 -3.816794
701.80 1,008.65 43.7233 51.90 73.50 41.61850
AVERAGE 8.974742 AVERAGE -15.5672

TABLE NO. 3.4.22

115
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.22

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

100

50

0
IN RS.

2008
1 2 3 4 5 6 7 8 9 10 11 12 2007
-50

-100

-150
SECURITY RETURN

116
23. TATA TEA LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
736.00 711.05 3.389946 918.00 837.05 -8.818083
715.80 617.00 -13.80274 838.10 822.75 -1.831524
615.00 607.85 -1.162602 818.90 824.35 0.665527
601.00 775.95 29.10982 849.00 912.25 7.449941
789.90 921.00 16.5970 922.00 863.50 -6.34490
940.00 852.75 -9.281915 870.00 746.95 -14.14368
862.25 770.05 -10.69295 750.00 759.95 1.326667
761.00 751.45 -1.254928 739.00 707.90 -4.20839
758.00 802.30 5.84433 710.00 707.90 -0.295775
805.00 821.45 2.043478 677.75 505.15 -25.4666
825.00 762.95 -7.52121 532.95 527.90 -0.94756
780.00 905.65 16.10897 514.00 602.15 17.14981
AVERAGE 1.883109 AVERAGE -2.95538058

TABLE NO. 3.4.23

117
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.23

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

40
30
20
IN RS.

10 2008
0 2007
-10 1 2 3 4 5 6 7 8 9 10 11 12
-20
-30
SECURITY RETURN

118
24. RELIANCE COMMUNICATIONS LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
471.00 461.00 -2.123142 749.70 601.95 -19.707883
465.00 407.45 -1237634 606.00 574.75 -5.156766
415.00 420.00 1.204819 564.80 508.30 -10.00354
389.00 477.10 22.64781 514.00 579.75 12.79183
482.10 505.05 4.760423 582.00 577.15 -0.833333
510.05 517.05 1.372414 575.00 442.40 -23.0609
520.00 558.80 7.461538 430.10 500.05 16.26366
550.00 543.00 -1.27273 500.35 395.70 -20.91536
545.00 585.65 7.45872 394.00 333.90 -15.2538
590.30 771.95 30.7725 337.80 220.70 -34.66548
789.00 674.85 -14.46768 226.00 195.50 -13.71681
679.40 746.50 9.87636 198.00 227.25 14.77273

AVERAGE -103131 AVERAGE -8.29047

TABLE NO. 3.4.24

119
CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.24

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

200000
0
-200000 1 2 3 4 5 6 7 8 9 10 11 12
-400000
2008
IN RS

-600000
2007
-800000
-1000000
-1200000
-1400000
SECURITY RETURN

120
25. TATA STEEL LIMITED

In Rs.

2007 2008

SEC RETURN SEC RETURN

0PEN CLOSE [(X2-X1)/X1] OPEN CLOSE [(X2-X1)/X1]
(X1) (X2) *100 (X1) (X2) *100
484.00 463.95 -4.142562 938.00 733.50 -21.801706
465.00 442.50 -4.83871 748.00 801.55 7.159091
449.70 449.60 -0.022237 790.00 693.15 -12.2595
445.00 549.60 23.505618 700.00 817.60 16.8
555.10 632.20 13.88939 825.90 902.90 9.323163
635.00 597.20 -5.952756 906.00 728.35 -19.60817
602.00 655.40 8.870432 730.00 654.95 -10.28082
641.20 689.70 7.563943 649.20 600.35 -7.524646
692.00 850.35 22.88295 595.00 425.60 -28.47058
860.00 905.05 5.238372 431.00 210.10 -51.25290
924.00 825.70 -10.638529 219.00 150.95 -31.07306
833.00 934.80 12.22089 153.00 216.85 41.732026
AVERAGE 5.714733 AVERAGE -1.31862

TABLE NO. 3.4.25

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CHART SHOWING SECURITY RETURN TO THE SHARE HOLDERS

CHART NO. 3.4.13

CHART SHOWING SECURITY RETURN TO THE

SHARE HOLDERS

60
40
20
IN RS.

2008
0
2007
-20 1 2 3 4 5 6 7 8 9 10 11 12

-40
-60
SECURITY RETURN

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26. OVERALL SECURITY RETURN ANALYSIS

Return to the share

holders in 2007
Company 2007 2008
when Compared to
2008
National Aluminium Company 7.128762 -5.314240 DECREASED
Limited
Hero Honda Motors Limited -0.89273 1.310991 INCREASED
Tata Motors Ltd -1.44808 -9.83918 DECREASED
State Bank Of India 5.582323 -4.06417 DECREASED
Grasim Industries Limited 3.43423 -5.77146 DECREASED
Infosys Technologies Limited -1.07817 -1.44435 DECREASED
DLF Limited 5.441956 -6.59632 DECREASED
Hindustan Unilever Limited -0.28311 1.350499 INCREASED
Bharat Heavy Electricals 1.829998 -4.58505 DECREASED
Limited
Bharat Electronics Limited 3.68864 -8.95484108 DECREASED
Larsen & Toubro Limited 10.29525 -4.90675 DECREASED
Housing Development 3.530283 -5.85946 DECREASED
Finance Corporation Limited
Sun Tv Network Limited -5.2414 -5.85856 DECREASED
Sterlite Industries Limited 6.417991 -8.60579 DECREASED
Sesa Goa Limited 9.357114 -13.7433 DECREASED
Pantaloon retail (India) 5.752339 -11.4872 DECREASED
Limited
Oil & Natural Gas 3.09350775 -3.17795 DECREASED
Corporation Limited
Tamil Nadu Newsprint & 1.631053 -178.06 DECREASED
Papers Limited
Castrol India Limited 4.253081 0.469578 DECREASED
NTPC Limited 4.7686075 -2.37288 DECREASED
Reliance Industries Limited 7.18437 -6.45765 DECREASED
Shree Renuka Sugars 8.974742 -15.5672 DECREASED
Limited

TABLE NO. 3.4.26

123
INTREPRETATION

The average security return has gradually decreased for all the

companies during 2008 when compared to 2007 and two companies

HERO HONDA MOTORS LTD and HINDUSTAN UNILEVER LTD has

been increased

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 CHAPTER - IV

FINDINGS, SUGGESTION AND CONCLUSION

TABLE NO. 4.1

OVERALL RESULTS

S.NO PARAMETER POST IPO STATUS

1 Operating profit margin Changed
2 Gross profit margin Changed
3 Net profit margin No Change
4 Return on net worth No Change
5 Return on long term funds No Change
6 Current ratio No Change
7 Quick ratio No Change
8 Inventory turnover ratio No Change
9 Long term debt equity ratio Changed
10 Fixed asset turnover ratio No Change
11 Earning retention ratio No Change

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4.1. FINDINGS

 The IPO has created a significant change in the profitability of the

companies by means of Operating Profit, Gross Profit. And the
Operating Profit and Gross Profit of the companies have been
increased during the post IPO period when compared to pre IPO
period.

 But IPO has not created any significant change in Net Profit, Return
on Net worth and Return on Long term funds.

 The liquidity of the company has not undergone any major changes
during pre and post IPO periods which are revealed by the current,
quick, and inventory turnover ratios.

 The leverage ratios by the way of debt equity ratio have diverged
during pre and post IPO period. That is debt equity ratio have been
increased during the post IPO period when compared to pre IPO
period.

 Fixed asset turnover ratio has not changed extensively during pre and
post IPO periods.

 There is no noteworthy difference in earning retention ratio during pre

and post IPO periods.

 All the twenty five companies showed a drastic fall in the security
return to the share holders during the year 2008 when compared to
2007.

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4.2. SUGGESTIONS & CONCLUSION

The performance of companies before and after IPO is

considerable interest to all parties like investors, policy makers, financial
institutions, and of course to academicians also. The companies take a lot
of money from public through IPO. So it is very important to know whether
the companies are performing efficiently or not. And here is an attempt to
measure the performance of the companies before and after issuing IPO.
This study reveals the fact that most of the companies’ profitability has
been increased immediately after issuing IPO.

By analyzing the companies performance Using wilcoxon signed

rank test, it can be concluded that the Net profit, Return on networth,
Return on long term funds, Current ratio, Quick ratio, Inventory turnover
ratio, fixed asset turnover ratio, Earning retention ratio has not changed
during pre and post IPO periods.

The study clearly emphasizes that the most of the companies’

performance showed a negative sign in the second year after issuing IPO
and these are revealed by the factors like beta, security return to the share
holders and this may be due to the general economic slowdown. So the
best solution to the companies and to the investors is to wait till the market
recovers so that they can earn profit in the long run. And also the
companies before issuing IPO has to monitor the economy at large and
must ensure that it takes place at the right time and for the right price.

127
 BIBLIOGRAPHY

 C.R.Kothari, Research Methodology, Wiswa Prakasham, New

Delhi.

 G.G.Beri, Marketing Research, Tata McGraw – Hill Publishing Co

Ltd., 1996

 I.M. Pandey, Financial Management,VIKAS Publishing House Pvt

Ltd.

 Khan M.Y and Jain P.K (2005), Financial management. Pearson

Publications.

 R.S Bhardwaj Business Statistics, Excel books.

Websites

 www.nseindia.com

 www.bseindia.com

 www.emkayshare.com

 www.sharetermpapers.com

 www.managementparadise.com

 www.moneycontrol.com
 www.wikipedia.com

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