This document outlines a study on investment in initial public offerings (IPOs) in India. The study aims to analyze the short-term and long-term performance of IPOs by examining returns in both the primary market at issuance and secondary market post-listing. The methodology will use descriptive and analytical research approaches. Some limitations include only examining return performance and not accounting for risk. The objectives are to compare returns in the short period after listing versus long-term, and determine if returns are typically higher in the short or long-run for IPOs.
This document outlines a study on investment in initial public offerings (IPOs) in India. The study aims to analyze the short-term and long-term performance of IPOs by examining returns in both the primary market at issuance and secondary market post-listing. The methodology will use descriptive and analytical research approaches. Some limitations include only examining return performance and not accounting for risk. The objectives are to compare returns in the short period after listing versus long-term, and determine if returns are typically higher in the short or long-run for IPOs.
This document outlines a study on investment in initial public offerings (IPOs) in India. The study aims to analyze the short-term and long-term performance of IPOs by examining returns in both the primary market at issuance and secondary market post-listing. The methodology will use descriptive and analytical research approaches. Some limitations include only examining return performance and not accounting for risk. The objectives are to compare returns in the short period after listing versus long-term, and determine if returns are typically higher in the short or long-run for IPOs.
This document outlines a study on investment in initial public offerings (IPOs) in India. The study aims to analyze the short-term and long-term performance of IPOs by examining returns in both the primary market at issuance and secondary market post-listing. The methodology will use descriptive and analytical research approaches. Some limitations include only examining return performance and not accounting for risk. The objectives are to compare returns in the short period after listing versus long-term, and determine if returns are typically higher in the short or long-run for IPOs.
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A SYNOPSIS
ON INVESTMENT IN INITIAL PUBLIC OFFERING
K.AJAY KUMAR (131218672122) CHAPTER PLAN
1.Introduction
2.Need for the study
3.Scope of the study
4.Objectives of the study
5.Research methodology
6.Limitations of the study
INTRODUCTION
An initial public offering(IPO) or stock market launch is a type of public
offering where shares of stock in a company are sold to the general public for the first time.
This is done by offering those shares to the public, which were held by the Promoters or the private investors.
This is why doing an IPO is also referred to as “going public”.
IPO’s are often issued by similar, younger companies seeking capital to
expand, but can also be done by large privately-owned companies looking to become publicly traded. NEED FOR THE STUDY
IPO’s are often looked upon as a speculative opportunity to earn abnormal
profits on the listing day.
Companies which decide to go public face the added pressure of the market which may cause them to focus more on short-term results rather than long- term growth.
The actions of the company's management also become increasingly
scrutinized as investors constantly look for rising profits.
This may lead management to perform somewhat questionable practices in
order to boost earnings. SCOPE OF THE STUDY
In this study attempts are made to discover in general the rates and trends of returns both in short run and long run on sampled IPOs listed on India’s Premier Stock Exchanges.
The study will be useful to the Investment Bankers in deciding the issue price of the IPOs.
It will also be useful to the investors in deciding whether or not to invest in
a particular IPO on the basis of its price.
The study will also be useful to the Securities and Exchange Board of India and Government in making policies and issuing guidelines in future regarding IPOs. OBJECTIVES OF THE STUDY
To find out the performance of Indian IPOs for short period, i.e. from the date of offer to the public to the date of their first day of trading after listing on stock exchange.
To measure the long term performance of Indian IPOs including and
excluding initial returns.
To analyze whether the returns are more in short term or long term for better conclusion. RESEARCH METHODOLOGY Descriptive Research: Descriptive research is used to obtain information concerning the current status of the phenomena to describe “what exists” with respect to variables or conditions in a situation. Descriptive research also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, where, what, when and how. Analytical Research: Analytical research takes a descriptive research one stage further by seeking to explain the reasons behind a particular occurrence by discovering casual relationships. Once casual relationships have been discovered the search then lifts to factors that can be changed (variables) in order to influence the chain of causality. LIMITATIONS OF THE STUDY
This study aimed at analyzing the performance of IPO both in primary market and secondary market.
Investment tools like the Raw Returns, Market Adjusted Excess Returns is used to analyze both the short term and the long term performance.
It is important for the investors to analyze the trend of IPO stocks to make informed decisions.
The results show that there are few companies that offered higher returns in the primary market and sold in the secondary market, whereas there is only one company which gives higher returns in the primary market and one company which gives higher returns in the secondary market. THANK YOU
