Pricing & Performance of Initial Public Offerings (IPOs)

This paper is carried out to Analyse, observe the stock prices of the IPO, Factors affecting the performance of the stock after it has been listed on the stock exchange and evaluating the long run performance of the IPOs. This is a paper wherein a study has been carried out specifically of the IPOs listed under the Construction and Engineering sector of India from the year 2009 to 2014. The data is extracted from NSE (National Stock Exchange) for all the companies. The data analysis is done in two parts. The first section uses BHAR (Buy-and-Hold abnormal rate of returns) to evaluate the long run performance of the selected Initial Public Offerings. Various variables are being used. BHAR being the dependent variables, we have taken four independent variables i.e., Issue Size, Company Size, Time Lag and Company Age. After three years listed in IPO, the condition shows that in the industry of Construction and Engineering, the factors shows that the age of the company and the time lag influence the long run price performance of the IPOs in India as the regression is significant. However, only the age of the company is the only factor that shows a positive influence on the long run IPO performance. The study signifies that the age of the company has a positive influence on the long run performance of the IPOs of the company. The study finds that if a company in the industry of Construction and Engineering stays and is in operation for a longer period of time, then it will result in the better long tern performance. This study examines the long run performance of IPOs in India under the Construction and Engineering Industry. Results show that there is a positive relationship between the age of the company and the long run performance of the IPOs. However one of the factors i.e., the time lag shares a negative relationship with the long run performance of the concerned IPOs. The study also reveals that the factors such as company size and the issue size do not influence the long run performance of the IPOs of the listed companies on National Stock Exchange issued under the Construction and Engineering Industry in India.