The initial listing performance of Indian IPOs Available to Purchase

Describes the environment for making initial public offerings (IPOs) in India and the process itself; and discusses the applicability of various research explanations for underpricing to the Indian Market. Suggests that it will be greater for new firms and issues managed by reputable merchant bankers; and analyses 1992‐1994 data on 386 IPOs to assess their performance. Shows that issues with high risk and/or smaller offer prices are more underpriced; and that returns are strongly correlated with subscription levels. Discusses the underlying reasons for this and the implications for public policy.