A

PERFORMANCE OF IPO OF REAL – ESTATES

SECTOR IN INDIA 2008-2010

SUBMITTED BY GUIDED BY

MR. PRADIP P. JANI MISS. KIRAN MUNGARA

(Roll No.097230592012)
MR. JIGNESH S. UPADHYAY
(Roll No.097230592024)

ACADEMIC YEAR

2009-2011

SUBMITTED TO

K.N.V. INSTITUTE OF BUSINESS MANAGEMENT RAJKOT

AFFILIATED TO

GUJARAT TECHNOLOGICAL UNIVERSITY

AHMEDABAD
3.1) Introduction

3.2) Title of the study

3.3) Objective of study

3.4) Review of literature

3.5) Research design

3.6) Scope and significance of study

3.7) Hypothesis of study

3.8) Tools of analysis

3.9) Nature and data collection

3.10) Period of study

3.11) Outline of the chapter plan

3.12) Limitation of study

3.1. INTRODUCTION

An initial public offering (IPO) occurs when a company first sells common shares to investors
in the public. Generally the company offers binary shares this way although some times –
secondary shares are also sold as IPO’s, they need to hire a corporate lawyer as well as an
investment banker to under – write the offer. The actual sale of shares is generally offered by
stock exchange or by regulators when the company starts to offer IPO’s they are usually
required to reveal financial information about the company so that investors know whether the
companies a good investment or not.

The Indian primary market has come a long way particularly in the last decade after
deregulation of the Indian economy in 1991-92, both the primary & secondary markets have
had their fair share of reforms structural cum policy changes time to time, the most
commendable being the dismantling of the controller of capital issue (CCI) & introduction of the
free pricing mechanism, this changes the whole fact of initial public offering market (IPO), the
findings of a research study done to assess the return on investment on IPO’s in Indian based
on sample data of 10 listed Indian companies during 1 st Jan 2008 to 31st Dec 2010. a majority
of Indian companies have quite willingly complied with the prescribes requirements of return on
investment in present of for future.

There is some limitation in IPO line time of expensive disclosure decision bases upon stock
price, regulatory renew falling stock price, vulnerability etc. But IPO is the best source to
business as well as the investors to raise the funds.

3.2. TITLE OF THE RESEARCH PROBLEM

IPO can generate a great deal of interest & media attention especially when they experience
large increase in valve during initial trading, so after going through existing literature in the
library & after deep discussion with the guide researcher has selected topic this topic has been
selected after considering the availability of time information existing literature tools of
techniques & other relates sources. The topic for this research has been selected as under.

“A PERFORMANCE OF IPO OF REAL ESTATES SECTOR IN INDIA 2008 – 2010”

3.3. OBJECTIVE OF THE STUDY

 To know the concept of IPO

 To assess best performance of IPO from the selected companies.
 To find the list of IPO
 To investigate the effect of individual shares price volatility on the stock market index
volatility.
 To make suggestion on IPO performance.

3.4. REVIEW OF LITERATURE

With regard to this research study the researcher has referred various books, articles,
newspapers & various research work related with this area a few of them has been stated
below.

 KPMG’S PRIVATE EQUATY GROUP

In their study entitled “private equity investing in India” they have attempted to examine the
Private equity in Indian. The objective was to ascertain how the Private equity market has
developed in India, and how the marketplace might continue to develop.

 DR. H. N. AGRAWAL “INDIAN CAPITAL MARKET & INVESTOR PROTECTION

In this article have presented the mobilization of funds from primary segment increased
tremendously from an average of Rs. 90 cr. in 1970’s to staggering figure of Rs. 31014 Cr. in
1994-1995 the fund are being mobilized through common methods, like public issues through
prospects offer for sale private placement & high issue for both types of investments, viz,
shares & debentures.
  SAURABH GHOSH “REVISITING IPO UNDER PRICING IN INDIA”

This papers attempts to identify the factors explaining IPO under pricing in an emerging
economy India using 1842 companies that got losted on the BSE from 1993 to 2001.

The high average risk significant negative relation between risk & under pricing during the high
volume period and insignificant relation of the same during the cold period suggest the some of
the issuers took the advantage of investors optimism to collect as much many as possible
during the hot period.

 Vijaya B. Murisetty & Murti G., Subramanyam Group affiliation of the performance
of IPO in Indian stock market.

Comprehensive study of the Indian IPO market focusing on the effect of group affiliation on the
initial performance in the post listing market.

 Ashutosh Verma Long memory of the Indian Stock Market

The results suggest there is no long range deference & that the Indian stock market is not
characterized by the presence of the long memory.

 Chandrasekhar Krishnamurti, Pradeep Kumar, (2002)

Chandrasekhar Krishna Murti, Pradeep Kumar, (2002) have writer an article an the initial listing
performance of Indian IPO’s published by managerial Finance studies, university of Delhi. The
article describes the environment for making initial public offerings (IPO’s) in India & the
process itself & discusses the applicability of various research explanations for under pricing to
the Indian market suggests that it will be greater for new terms & issues manages by
reportable merchant bankers; & analyses 1992 – 1994 data on 386 IPO’s to assess their
performance shows that issues with high risk or smaller offers prices are more under prices &
that returns are strongly correlated with subscription labels. Discusses the underlying reasons
for this & the implication for public policy.
  Ministry of External Affairs Govt. of India (2009)

A study has been made on IPO market to boom in second halt 2010 by ministry of external
Affairs Govt. of India in weekly economic Bulletin India may be in the throes of a meltdown but
slowdown may best be look at the IPO’s estimates for 2010 and it’s not just doubling or tripling,
Indian the may actually be gearing Up to raise four times the process it collected from the
primary market in 2009 acc to a Thomson Reuters study India inc is eyeing to raise as much
as Rs. 77,500 cr. through public issues this is in sharp contrast to 2008 when IPO’s garnered
only about 22000 cr. IPO’s is the most awaited in India.

3.5. RESEARCH DESIGN

The research design is the conceptual structure or strategy within which research is
conducted, it constitutes the blue print for the collection, measurement and analysis of data.
Research design includes an outline of what the researcher will do from writing the hypothesis
and its operational implications to the final analysis of data.

 UNIVERSE :

The present study has been carried out at a micro level, since it is not possible for the
researcher to conduct it at a macro level. As such the researcher has taken the 10 indian listed
companies in Indian stock Exchange.

 SAMPLE SIZE :

The size of the sample consists of 10 Indian listed companies in Indian Stock Exchange.

 SAMPLING DESIGN :

The researcher has collected the data on secondary base and it is based on the random
convenient sampling technique.
  SAMPLING TECHNIQUE :

The researcher has used the chain based Index method and Spearman’s Rank correlation for
the research.

 SOURCE LIST :

Data regarding 10 companies has been collected from Company websites www.bseindia.com
and www.nseindia.com for the period from 01/04/2008 to 31/03/2010.

3.6. SCOPE OF THE STUDY :

As part of the research study researcher has selected performance of real estate sector in
India on “IPO & FPO”. The title of the problem is to analyze the return of IPOs.

3.7. HYPOTHESIS OF THE STUDY :

 NULL HYPOTHESIS :

There would be no significant relationship between high price and close price.

 ALTERNATIVE HYPOTHESIS :

There would be significant relationship between high price and close price.

3.8. TOOLS OF ANALYSIS :

 CHAIN BASED INDEX METHOD :

When a year to year comparison is desired, the index number are calculated by chain based
method. In this method the base period continuous to shift for every subsequent year. Each is
taken as the base for immediately next year, the first year itself being its own base.
  SPEARMAN RANK CORRELATION TEST :

When the data are not available to use in numerical form for doing correlation analysis but
when the information is sufficient to rank the data as first, second, third, and so forth, we quite
often use the rank correlation test and workout the coefficient of rank correlation is a measure
of correlation of that exists between two sets of ranks. In other world it is measure of
association that is based on the rank of the observations and not on the numerical values of
the data. It was developed by famous stratification Charles Spearmen in the early 1900s; and
as such it is known as Spearmen’s Rank Correlation of Coefficient Test.

3.9. NATURE AND DATA COLLECTION OF THE STUDY :

The present study is based on secondary data. The data relating to the selected Indian
companies have been collected from the Internet, Newspapers, Magazines, Journals, Books,
Company websites for the years 01-04-2008 to 31-03-2010.

3.10. PERIOD OF THE STUDY :

Period of the study is limited and bounded to two year which was started from 01-04-2008 to
31-03-2010.
3.11. OUTLINE OF THE CHAPTER PLAN

The present study is divided into 5 chapters.

Chapter-1 : introduction of companies under study

This chapter reveals the researcher selected 10 companies. This chapter deals with brief
profile of 10 companies listed in Indian stock exchange.

Chapter – 2 : conceptual framework of IPO & real estates sector in India.

In this chapter researcher has included the IPO concept, types of issues, purpose, principle
steps for the issue, IPO process, IPO related information, consideration of IPOs SEBI’s
guidelines for IPOs, IPO scams, need for reforms, of securities, online IPOs, indication,
success or failure and new IPO in India , recent trend in real estates sector on IPO with
advantages and limitation .

Chapter -3: Research Methodology.

In that research methodology chapter the researcher defines introduction, title, objects and
review of literature also discussed research design, scope, hypothesis. Tools. Type of data
and collection, period of the study, chapter plan and limititationall are defined detailed in this
chapter.

Chapter -4:Aanalysis and Interpretation .

In this chapter details like new listing information , paid up capital of company, premium,
securities price high or low up to listed date to end of march, will be included.

Chapter -5 Summary, Findings, and Suggestion;

This chapter deals with summary and findings like top 10 companies of real estates and the
highest price and lowest price of securities during the study period.
3.12. LIMITATION OF RESEARCH:

1. Limitation of the secondary data will remain with this study.

2. Quality of relay outcome the quality of secondary data.
3. The IPO is very wide subject but researcher has covered only important points of that.
Therefore, the present study is limited to the points covered.
4. The figures of data to high or low they are effective.
5. Time, money, and ability is constrain to it apply research study.