A Study on

“THE PERFORMANCE ANALYSIS OF IPO PRICING IN INDIAN

CAPITAL MARKET”

A Project Submitted to

Bhagwan Mahavir College of Business

Administration

In partial fulfillment of the requirement

For the award of Degree of

Bachelor of Business Administration

in

Management

Under Faculty of Management

Submitted by

Ms. KRUTI SHAH

[Enrollment No. : E1808240000410168]

Under the guidance of

Dr. CHINTAN SHAH

Veer Narmad South Gujarat University, Surat

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 DECLARATION
I, Kruti Shah of Bhagwan Mahavir College of Business Administration,
Vesu – Surat, hereby declare that the project report has been undertaken
as a part of 6th Semester of Bachelor of Business Administration (BBA)
syllabus of Veer Narmad South Gujarat University, Surat. I declare that
this report has not been submitted to any other university or institute for
any other purpose.

Date:

Place: Bhagwan Mahavir College of Business Administration

Kruti Shah

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 ACKNOWLEDGEMENT
The work of doing research for the BBA degree needs support of many
people.It is these people who have made sure that what qas my passion and
interest turned out to be concrete body of knowledge produced after
rigorous empirical work and scientific analysis.

On the very outset of the report, I would like to extend my sincere &
heartfelt obligation towards all those who helped me in this endeavor.
Without their active guidance, help, cooperation & encouragement, I would
not have made headway in the project.

I wish to express my sinere thanks to Dr. Cheta Desai, I/C. Principal of

I wish to express my gratitude to my internal guide Dr. Chintan Shah

Last but not the least, I thank all those who have helped me directly or
indirectly during the course of this project.

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 ABSTRACT

As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the current
industry, mainly because of India being a developing country and lot of growth in
various sectors which leads a country to ultimate success. And when we talk about
country’s growth which is dependent on the kind of work and how much importance
to which sector is given. And when we say or talk about industries growth which
leads the economy of country has to be balanced and given proper finance so as to
reach the levels to fulfill the needs of the society. And industries which have massive
outflow of work and a big portfolio then it’s very difficult for any company to work
with limited finance and this is where IPO plays an important role.

This report talks about how IPO helps in raising fund for the companies going public,
what are its pros and cons, and also it gives us detailed idea why companies go public.
How and what are the steps taken by the companies before going for any IPO and also
the role of (SEBI) Securities and Exchange Board of India the BSE and NSE , what
are primary and secondary markets and also the important terms related to IPO. And it
also tells us how we can more or less judge a good IPO.

Various techniques learned named IPO’s Return, Market return, Abnormal Return,
MAAR (Market Abnormal Adjusted Return), CAAR (Cumulative average abnormal
return. Descriptive design is used for research.

In this MAAR mode return are calculated and on that basis it is said that the short-
term return is positive MAAR. And CAAR in short-term performance of IPOs is the
positive and the higher chance to earn return in short-term IPOs for Indian investor.
This study shows that investment in IPOs generally positive benefit to Indian investor
in Short term IPOs. Reliance Home Finance Limited has high return as compare to all
IPOs. From the research it can conclude that if you take more Risk you get more
Return.

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 TABLE OF CONTENTS

Sr. No. Chapter Contents Page No.

1 Title Page i

2 Certificate Pages ii

2.1 Certificate by College ii

2.2 Declaration by Scholar iii

3 Acknowledgement iv

4 Abstract v

5 Table of Contents vi

6 List of Table viii

6.1 List of Chart ix

6.2 List of Abbreviation x

7 Ch-1 INTRODUCTION 1

1.1 Initial Public Offering 1

1.2 Process involved in IPO 4

1.3 Two sides of IPO 6

1.4 Indian Capital Market 7

1.5 Industry Profile 11

1.6 Types of Broking firms 12

1.7 PESTEL 23

1.8 Currents Trends if Industry 25

8 Ch-2 REVIEW OF LITERATURE 29

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9 Ch-3 RESEARCH METHODOLOGY 37

3.1 Problem Statement 37

3.2 Research Objective 37

3.3 Research Design 37

3.4 Types of Research Design 37

3.5 Data Collection Tool 38

3.6 Tool of Analysis 38

3.7 Significance of Study 38

3.8 Limitation of Study 38

10 Ch-4 DATA ANALYSIS & INTERPRETATION 41

4.1 MAAR 41

4.2 CAAR 62

4.3 Comparative Analysis 83

4.4 Test of Normality 86

11 Ch-5 DISCUSSION 89

5.1 Findings 89

5.2 Conclusion 91

5.3 Recommendation 92

12 Bibliography 93

13 Annexure 98

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 LIST OF TABLE

Sr. No. Table No. Particulars Page No.

1. 6.1 MAAR of Listing Day 41

2. 6.2 MAAR of 1 Month 45

3. 6.3 MAAR of 3 Month 49

4. 6.4 MAAR of 6 Month 53

5. 6.5 MAAR of 1 Year 57

6. 6.6 CAAR of Listing Day 62

7. 6.7 CAAR of 1 Month 66

8. 6.8 CAAR of 3 Month 70

9. 6.9 CAAR of 6 Month 74

10. 6.10 CAAR of 1 Year 78

11. 6.11 Percentage change in IPO’s 83

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 LIST OF CHART

Sr. No. Chart No. Particulars Page No.

1. 6.1 MAAR of Listing Day 44

2. 6.2 MAAR of 1 Month 48

3. 6.3 MAAR of 3 Month 52

4. 6.4 MAAR of 6 Month 56

5. 6.5 MAAR of 1 Year 60

6. 6.6 Comparison of Avg. MAAR 61

7. 6.7 CAAR of Listing Day 65

8. 6.8 CAAR of 1 Month 69

9. 6.9 CAAR of 3 Month 73

10. 6.10 CAAR of 6 Month 77

11. 6.11 CAAR of 1 Year 81

12. 6.12 Comparison of Avg. CAAR 82

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 LIST OF ABBREVIATION

Sr. No. Abbreviation Full Form

1. IPO Initial Public Orffering

2. NSE National Stock Exchange

3. BSE Bombay Stock Exchange

4. SEBI Securities& Exchange Board of India

5. CCI Controller of Capital Issues

6. RBI Reserve Bank of India

7. MAAR Market Adjusted Abnormal Return

8. CAAR Cummulative Average Abnormal Return