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How Accurately are Indian IPOs Valued

Sandeepan Das Dr Saravanan V

Subject area: Management and Commerce  ·  Area of research: Indian IPOs

Abstract

The valuation accuracy of Indian Initial Public Offerings (IPOs) is a critical aspect of the financial market, impacting investors, issuers, regulators, and other stakeholders. In this study, we sought to address the pressing need to evaluate how accurately Indian IPOs are valued by examining various factors influencing IPO pricing and performance. Our findings shed light on key insights essential for informed decision-making in the IPO market. Firstly, timely listing emerged as a crucial factor, with longer listing delays associated with diminished long-term performance, underscoring the importance of efficient market access and prompt IPO execution. Additionally, higher promoter holding correlated positively with short-term post-IPO returns, reflecting initial market success driven by promoter confidence. However, this positive association did not extend to long-term performance, highlighting the need for a nuanced evaluation of IPO dynamics. Moreover, investor sentiment, as measured by subscription rates, significantly impacted short-term listing gains, indicating strong demand and positive market sentiment towards oversubscribed IPOs. Yet, this enthusiasm did not consistently translate into sustained long- term performance, suggesting the importance of cautious evaluation beyond initial market enthusiasm. Furthermore, a negative correlation between issue size and long-term profitability implies challenges for firms in deploying capital effectively. In conclusion, our study not only provides valuable insights for stakeholders but also underscores the necessity for further research to inform evidence-based policy and investment strategies in the Indian IPO market, addressing the need for accurate valuation and sustainable long-term performance.

References

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How to cite this paper

Sandeepan Das, Dr Saravanan V "How Accurately are Indian IPOs Valued" Iconic Research And Engineering Journals Volume 9 Issue 1 2025 Page 675-704
Sandeepan Das, Dr Saravanan V "How Accurately are Indian IPOs Valued" Iconic Research And Engineering Journals, vol. 9, no. 1, Jul. 2025
Sandeepan Das, Dr Saravanan V (2025). How Accurately are Indian IPOs Valued. Iconic Research And Engineering Journals, 9(1).
Sandeepan Das, Dr Saravanan V "How Accurately are Indian IPOs Valued" Iconic Research And Engineering Journals, vol. 9, no. 1, Jul. 2025. 
@article{1709667,
      author = {Sandeepan Das, Dr Saravanan V},
      title = {How Accurately are Indian IPOs Valued},
      journal = {Iconic Research And Engineering Journals},
      year = {2025},
      volume = {9},
      number = {1},
      pages = {675-704},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1709667.pdf},
      abstract = {The valuation accuracy of Indian Initial Public Offerings (IPOs) is a critical aspect of the financial market, impacting investors, issuers, regulators, and other stakeholders. In this study, we sought to address the pressing need to evaluate how accurately Indian IPOs are valued by examining various factors influencing IPO pricing and performance. Our findings shed light on key insights essential for informed decision-making in the IPO market. Firstly, timely listing emerged as a crucial factor, with longer listing delays associated with diminished long-term performance, underscoring the importance of efficient market access and prompt IPO execution. Additionally, higher promoter holding correlated positively with short-term post-IPO returns, reflecting initial market success driven by promoter confidence. However, this positive association did not extend to long-term performance, highlighting the need for a nuanced evaluation of IPO dynamics. Moreover, investor sentiment, as measured by subscription rates, significantly impacted short-term listing gains, indicating strong demand and positive market sentiment towards oversubscribed IPOs. Yet, this enthusiasm did not consistently translate into sustained long- term performance, suggesting the importance of cautious evaluation beyond initial market enthusiasm. Furthermore, a negative correlation between issue size and long-term profitability implies challenges for firms in deploying capital effectively. In conclusion, our study not only provides valuable insights for stakeholders but also underscores the necessity for further research to inform evidence-based policy and investment strategies in the Indian IPO market, addressing the need for accurate valuation and sustainable long-term performance.},
      month = {July},
  }