Title of the Project

Decoding IPOs : Performance Trends and Investor Perception in

India

Submitted by
Name of the candidate :
Ketan Jain
Registration Number: A01-1112-1300-22

Supervised by
Name of the Supervisor :
Dr. Sreemoyee Guha Roy

Month & Year of Submission

April, 2025
Introduction:
Intial Public Offerings has boomed in past couple of years by being able to capture the
attention of various interested stakeholders such as investors, institutional entities, and
regulatory bodies, all of them plays a crucial role in functioning of capital markets. IPOs are
basically the initial stage when a company offers its shares to the public and giving them the
opportunity to invest in company’s growth success and raising sufficient capital. Studies
shows that the returns which are obtained in short term may be considerable , however it has
considerably and consistently been outperformed by market indices when long term
performance is considered .
In India , IPOs have gone under tremendous changes over the past few decades , mostly
because of significant increased participation from retail and institutional investors as well as
regulatory reforms. Some research suggests that Indian IPO market has outperformed and
gains on listing days were higher than expected but their long term performance has
witnessed consistently volatile returns because of factors like market timing, company
fundamentals, and economic conditions. During 2014 to 2024, the Indian IPO market has
showcased rapid growth alongside periods of extreme market volatility which has made it a
complex area for performance assessment .
These period has witnessed one of the most number of IPO listings as well some of the
largest public offerings in history.The number of demat holders has been at its peak but the
decade was also challenged by the COVID-19 pandemic , which introduced extreme
volatility in the markets.
IPOs has performed because of attractive inherent risk-reward ratios.Though IPOs have
delivered in terms of short-term returns, long-term performance remains uncertain which may
lead to capital erosion for investors. Some recent studies have shower that a large proportion
of Indian IPOs are initially underpriced which may result in positive short-term gains. But
there sustainability have been in question as they underperform when compared to broader
market indices .
This dissertation focuses on analyzing the performance of IPO markets (short term or long
term returns ,etc) as well as the investor perception of the current Indian IPO markets.
Rationale:
The Indian IPO market has been experiencing significant growth in recent years which has
been largely influenced by growing investors participation and an increase in companies
which are raising capital for the first time. Despite this, the success of IPOs is not a fairy tale,
with some IPOs yielding impressive gains but many of them gives an ordinary returns after
their debut. Investors sentiment influences IPO demand and valuation, however the
relationship between how investors behave and the eventual success of an IPO is still unclear
and uncertain.
Exploring this dynamism would be critical and crucial for investors, regulators, institutions
and companies preparing for public listings. While existing research focuses on financial
indicators like underpricing and post-IPO results and performance, fewer analyses deals with
the roles of investors psychology, broader market sentiment and macro economic conditions
in shaping the performance.

Research Objectives:
 To assess the performance of the Indian IPO market in last decade soand emphasizing
on listing gains, long-term returns, and overall success rates.
 To explore how does macroeconomic factors such as interest rates, exchange rates,
inflation, GDP growth as well as government policies affects IPO activity .
 To examine the influence of behavioral finance on IPO investments, accounting
several factors like herd mentality, overconfidence, and the role of media in guiding
investor decisions.

Research Gap:
Despite the significant increase in demand of IPOs in India and growing retail participation,
there exists a significant gap in understanding the link between IPO performance and investor
sentiment.
Prior research studies has primarily examined IPO pricing anomalies and its long-term stock
performance and gains, but limited studies have researched on how investor sentiment
influences IPO subscriptions and returns.
Investors psychology, risk taking capacity, and herd behaviour are well-documented in global
studies, but limited research has been conducted in the Indian market to exmine how these
factors drives IPO investments.
This research is essential to bridge that gap, leading to a detailed perspective on how
investors sentiment relates or influences the IPO outcomes by incorporating numerical
financial data with qualitative insights. The results will offer investors with better guidance
for decision-making, assist regulators in promoting a stable market, and help companies
optimize their IPO pricing approaches.
Research Methodology:
The research utilises a mixed method where in both secondary market data analysis and
primary investor sentiment data are employed to assess IPO sentiment and overall
performance.

1. Research Design
Type of study : Descriptive,exploratory and casual comparative
 Descriptive: To explain the exisisting investors sentiment and identify the sources or
motivation before investing in IPOs
 Exploratory: To investigate investors attitudes, risk apetities, and view on Indian IPO
market.
 Causal-Comparative: To determine cause-and-effect relationships between investor
investing behaviour and motives

2. Data Collection Method

A. Primary Data Collection:

1. Surveys:
 Purpose: To collect information on investor attitudes, risk apetite, and behaviours
towards the Indian IPO markets.
 Instrument: Systematic questionnaires with both closed and open-ended questions.
 Variables: Questions addressed demographic data (age, income, residence), investor
experience, source of information they use or what are the things they look into
before investing in IPO
 Distribution: The survey was distributed online through platforms like Google
Forms
 Sample Size : The sample size of the study is 101

B. Secondary Data Collection:

 Literature Review: Exhaustive review of previous research papers, reports, and
studies dealing with IPOs pricing ,performance,share premiums or listing gains as
well as post IPO performance
 Industry reports from SEBI : Gathering information from reports on short term and
long term returns and post IPO returns and sector wise IPO performance.
Literature Review:

Khan, Mohammed et. al. (2021). This study revolved around investor perception where in
people invests in an IPO, hoping to strike gold. They took a deep dive on analysing the
driving factors on share premiums or the gains after the listings. The biggest takeaway was
that IPOs traded on the exchanges tend to be give much better returns in the long haul
compared to their short-term sizzle. It also observed that the companies which exaggerate
their share premiums often stumble after the IPO. It teaches us that holding onto these IPO
investments for the longer term boosts the returns but also minimises risk. It’s less of a
gamble and more of a slow, steady win.

Poornima, S., Haji, A.J., and Deepha, B. (2016). They aimed to tackle by analyzing how
these stocks performs on both when they first hit the primary market (the IPO launch) and
later in the secondary market (regular trading)..Understanding anomaly of an abnormal
returns in short term of companies listed through IPOs are analysed and also looks to
examine the long term performance of them. Using various examples of Indian companies,
they observed that IPO stocks can be a goldmine if they are in it for the long game. They
concludes thatb buying them at the IPO and holding them in the secondary market could
result in exponential gains. It’s fun for quick gains but not a sure bet if in for only listing
gains.

Kumar et al. (2017) and Gupta and Chakraborty (2020): This study explores the market
reaction to IPOs and investor behaviour and tells about the factors that influences these. It
examines the impact and factors of IPO announcements on stock prices and investor
sentiment. These studies also takes on the behavioral aspects of IPO investing in the Indian
context.

Bandyopadhyay and Das (2018): Academic interests has been drawn to the significance of
role of institutional investors in India’s initial public offers (IPOs).The study underlines
influence on IPO pricing, subscription levels, and performance after listing .These studies
stresses the importance of institutional involvement in shaping IPO outcomes
Pandey, A., & Pattanayak, J. K. (2022). This study evaluates unclear and complex
influences between various variables in the market . This found out that, India’s fast and
rising market where in companies that aggressively tweaking their numbers to see an
attractive and significant start. These IPOs led to big initial gains because investors sentiment
(herd behaviour). But if we fast forward a bit, then the stock corrects leading to huge losses to
uninformed investors. The stock doesn’t hold up well in the long run, with weaker returns
after the IPO buzz dies down.However , companies that discloses their financial reports
cautious and honest which mightoutperform in short run, but they win over time. Three years
post-IPO, these conservative players often see better stock performance.
This indicated that study are consistent with the theory of information asymmetry, which
implies that when companies engage in significant earnings management then they portrait th
actual value of IPO firms.

Lode and Deo (2015) and Dahiya and Kaur (2018): Underpricing in India’s initial public
offers (IPOs) has drawn significant focus from academic circles.The Study has conducted
examining the correlation between underpricing and subsequent long-term performance.
They found out that research on this matter are inconclusive, as some suggests that IPOs
launched below their true worth often show stronger post-listing outcomes. In contrast, others
argue that initial underpricing does not compulsorily results in consistent and sustainable
positive returns.

Manu, K.S., and Saini, C. (2020). They focused on companies which goot listed in 2017 and
used a method called event study to determine how fairly IPOs were priced as there main
motive was to know about why stocks were underpriced initially and what made their prices
jump around in the short term.
They uncovered that more than 65% of the IPOs they studied were sold cheaper than they
should’ve been right after listing but it was quite interesting to discover that things like the
company’s age, the size of the IPO or companies equity structure didn’t really influence the
price.

Limitations of the study :

 The Study was finished in a short period of time which limited on the breadth of
topics and extensiveness of the overall study.
 The findings may not be accurate due to the diversity and limited size of the
respondents of the survey .
 There was also constraints on money to be used
Conceptual Framework:

India’s IPO market prospers on a combination of financial outcomes and investor

psychology, with macroeconomic variables playing a crucial role in defining or shaping a
layout for both. IPO performance are generally computed by considering subscription rates,
listing gains, and long-term returns which stands as the central focus. Underpricing often
enhances initial demand, but its success depends on a range of interconnected drivers.
Investor perception are generally driven by market sentiment, risk appetite, and herd behavior
which acts as a strong force. These are enhanced by social media hype, news sentiment, and
market enthusiasm. In India,there has been significant rise in retail investors participation
which has been due to digital platforms and often pushing perception beyond their
fundamentals.

Macroeconomic factors interconnect into this dynamic significantly. For instance, interest
rates influences investor confidence and low rates of this makes IPOs attractive as equity
yields exceeds fixed income options, boosting subscriptions, while high rates could diminish
enthusiasm to invest , shifting funds to other asset classes and reducing demand. Inflation
also plays an essential role, moderate inflation might signal a good economic growth,
encouraging the investors to invest in IPOs, but volatile inflation erodes purchasing power
leading to lowering participation. GDP growth showcases market optimism and strong
growth aligns with the bullish sentiment which drives higher listing gains whereas decelerates
breed skepticism which may impact long-term returns.India is a place where economic
volatility is common and quite uncertain, these factors actively shapes how investors perceive
the risk-reward ratio. For example 2023 RBI rate hike might have cooled IPO ferver,
however in post-COVID growth spiked in 2021-22 IPO boom.
There are many firm specific elements like appealing sector, company size, or equity
structure or promoter holdings which interacts with macro conditions. A tech IPO might rise
in a growth phase but decline during inflation erosions if costs rise. Behavioural Finance
promotes this framework, suggesting that irrational exuberance or fear are magnified by
macro hints which skews IPO outcomes.
Macro Factors Investor IPO Subscription
(Interest Sentiment Rates
Rates,etc) Optimism,etc)

Listing Gains
Perception Shifts
(Risk Appetite)

Long-Term
Returns
Hyundai Motor India IPO: A Case Study Analysis

The Hyundai Motor India IPO which was launched on October 15, 2024 and closed on
October 17 which stood as India’s largest IPO till date which raised ₹27,870 crore capital
through an Offer for Sale (OFS) which was priced between ₹1,865 and ₹1,960 per share, it
choose a market capitalization of whooping ₹159,250 crore helping to leverage Hyundai’s
strong market share in India’s automotive sector, mainly its SUV dominance.

Subscription patterns disclosing a salient divide where in Qualified Institutional Buyers

(QIBs) subscribed 6.97 times showcasing sturdy institutional confidence in Hyundai’s
financial position, brand reputation, market position and the long term growth potential in the
market.However, retail individual investors (RIIs) subscribed only 0.5 times which fell short
of full subscription which was due to the reason of the steep price band and muted immediate
listing gains ,also followed by Non-Institutional Investors (NIIs) at 0.6 times. Employee
quotas saw 1.74 times subscription. Therefore this concludes what investor sentiment is
looking for is short term gains rather than investing in fundamentally strong IPOs.

The Grey Market Premium (GMP) played a crucial role in directing market perceptions.
Initially , it suggested that a 7% above premium which made over the ₹1,960 upper band but
it declined to ₹65 in terms listing gains, reflecting a very muted 3.32% premium. This further
declined due to broader market volatility and negative sentiment ,it aligned with trends
observed in renowned IPOs like LIC (₹21,000 crore, 2.95x subscribed) and Paytm (₹18,300
crore, 1.89x subscribed). LIC saw stronger retail participation (1.99x) but didn’t perform as
per expectation whereas Paytm’s tech faded with a negative GMP and poor post-listing
performance due to regulatory concerns.
It got listed on October 22, 2024 where in it steeped at ₹1,970, a marginal 1.33% gain, but
declined 7% lower at ₹1,819.60 which valued the firm below its $19 billion target. This
disappointed debut showcased a uncertain retail investor sentiment which prioritizes more on
affordability, short-term returns, and sector growth over sustainable and consistent stability.
Comparing it to LIC’s gradual decline and Paytm’s sharp fall ,Hyundai’s stability reflects
institutional support but underscores affordability issues with the retail participation. Future
IPOs should address retail accessibility and market timing to bridge this investor divide
effectively.
Data, Analysis and Findings:
A. Secondary data analysis

This segment would evaluate how IPOs have been performing in India over the years, based
on data sourced from the NSE (National Stock Exchange). This analysis glances on both
short-term and long-term trends and breaking down performance by sector, and even explores
why investors are drawn to IPOs. The findings of the analysis are elucidated below:

Short-Term IPO Performance

Average Listing Day Return (%)
80 Day Highest Listing Day Return (%)
Day Lowest Listing Day Return (%)
70
60
50
Return (%)

40
30
20
10
0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Year

Figure. 1 Short term IPO performance (Source : NSE Website)

Interpretation: It potraited about how IPOs perform at listing day. From 2014 to 2023, the
data shows volatile of listing day gains which is how much does the stock price jumps on its
debut compared to the issue price. The best year for the average listing gains was 2020 which
peaked at (26.3%) which was fueled by market uncertainty and investor demand during the
pandemic which indeed produced advantageous condition for high risk-high reward
investments. On that same year ,the highest listing day gains were reported to be 68.4%,these
were due to the impact of unexpected economic disruptions. The steady and sutaining
increase in returns was likely due to bullish market environment globally during 2014-17
which may be caused due to low interest rates or strong economic growth in major
economies. The sharp decline to 19.1% in 2022 indicates the post pandemic correction i.e
after 2020–2021 IPO boom where in some overvalued IPOs from past years have
underperformed.This indicates that investor midset on the overall market and broader markets
helps to determine the IPO success.
 IPO Performance in that year
Average 1-Year Return
60 (%)
1-Year Highest Return (%)
50

40
Return (%)

30

20

10

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
-10

Year

Figure. 2 IPO performance in that year (Source : NSE Website)

Interpretation : This graphs zooms out a bit and sees how IPOs perform over their first year.
During 2014 to 2023, the average 1 year return was 18.1% which peaked in 2020 due to the
uncertainty in that year. Observation could br drawn out that there is difficulty in sustaining
the hype from the day 1 which showcased by the ups and downs ,it could also be seen that the
year 2016 and 2019 relatively underperformed more .
.

Figure. 3 Long term IPO performance (Source : NSE Website)

Interpretation: This graph indicates that IPOs over long periods may underperform leading
to negative returns. Average returns over 5 year peaked in 2017, with return of 9.6%.
However an alarming trend was quite evident as multiple IPOs recorded negative returns over
these five years which highlights a pattern of underperformance in the long run.
This suggests that while IPOs might able to deliver the short-term gains but their ability to
consistently sustain the returns over longer periods may not able to satify investor sentiment,
this inconsistency could be due to the attributes such as weak underlying business
fundamentals, shifts in market dynamics, or broader economic challenges that erode value
over time.

Number of IPOs
11.3%

24.2%

26.9%
17.2%

20.4%

Technology Pharmaceuticals Consumer Goods

Financial Services Real Estate
Figure. 4 Sector wise no. of IPOs (Source : NSE Website)

20
Sector wise IPO Performance
18.23
18 16.89
16 14.56
13.78
14
Average return(%)

12
10 9.12
8
6
4
2
0
Technology Pharmaceu- Consumer Financial Real Estate
ticals Goods Services
Sectors
Figure. 5 Sectoral IPO performance (Source : NSE Website)
Interpretation: These graphs concludes that not all perform the same way some soar, while
others struggle. Tech IPOs have been the outperformer delivering an impressive average
return of 18.2% in their first year. Companies like Hexaware Technologies have ridden the
wave of digital transformation which got listed. Pharmaceutical sector has also performed
strong, with significant gains driven by the COVID-19 pandemic.Companies like Mankind
Pharma got listed, benefited from the global spotlight on healthcare. On the other end, real
estate IPOs had a tougher time, managing return of 9.1%.Financial Services and Consumer
goods performed decently during this period

B. Primary data analysis

Below are the results and analysis are from this questionnaire

Primary Motivation Behind Investing in IPOs

11.9% 3.0% 16.8%

14.9%
53.5%

Performance of existing companies Sector Performance Listing gains

Promoters Background Others

Figure 6. Source: M S Excel Output (Author’s Compilation)

Figure 6. Source: M S Excel Output (Author’s Compilationt)

Figure 7. Source: M S Excel Output (Author’s Compilation )

Figure 8. Source: M S Excel Output (Author’s Compilation)

 Figure 8. Source: RStudio Output (Author’s Compilation )
Interpretation: This graph shows the risk apetite of both the gender about the Indian IPO
market , It could be noted that mainly people believe investing in IPO is moderately risky but
males believes it to be more riskier than woman .

H0: There is no relationship between Risk Perception and Gender

H1: Significant relationship exists.
Pearson's Chi-squared test

data: table(data$Gender, data$Risk_Perception)

X-squared = 1.2631, df = 4, p-value = 0.8676

High Low Moderate Very High Very Low

Female 5.19802 3.118812 8.316832 1.663366 2.70297
Male 19.80198 11.881188 31.683168 6.336634 10.29703
Figure 9. Source: RStudio Output (Author’s Compilation )

Interpretation:Test Statistics or χ2 value (df =4) = 1.2631 ,p>0.5 i.e 0.88 > 0.05 shown in
Figure 9 indicates that there is no relationship between Gender and Risk Perception at 5%
level of significance . Therefore we could say that the null hypothesis has failed to be
rejected. Males and females rates risk are similarly across levels .These are what we expect
that if Gender and Risk Perception were unrelated (Expected Counts) i.e proportional split
based on totals (25 females, 76 males, and the distribution of risk)
Wilcoxon Test

H0: There is no distinction in distribution between the Confidence and Risk Perception
Wilcoxon rank sum test with continuity correction

data: data$Confidence_num and data$Risk_Perception_num

W = 3062.5, p-value = 3.423e-07
alternative hypothesis: true location shift is not equal to 0
Figure 10. Source: RStudio Output (Author’s Compilation)
Interpretation:Wilcoxon test statistic = 3062.5, p-value = 3.423e-07 < 0.05 shown in Figure
10 indicates that there is distinction between Confidence and Risk Perception at 5% level of
significance . Therefore we conclude that the null hypothesis is rejected, it suggests these two
perceptions diverge strongly .

Kendall Rank Correlation

H01: There is no significant relationship between Income and Risk Perception
Kendall's rank correlation tau

data: data$Risk_Perception_num and data$Income_num

z = -1.8172, p-value = 0.06919
alternative hypothesis: true tau is not equal to 0
sample estimates:
tau
-0.1528096
Figure 11. Source: RStudio Output (Author’s Compilation)
Interpretation: The correlation coefficient is -0.1528096 shows a weak and negative
relationship . As p-value = 0.0692 > 0.05 shown in Figure 11 indicates that there is no
significant relationship between Income and Risk Perception at 5% level of significance.
Therefore we conclude that the null hypothesis is failed to be rejected. Wealthier investors
might feel slightly less risky about IPOs

H02: There is no significant relationship between Age and Holding Period

Kendall's rank correlation tau

data: data$Age_num and data$Hold_Period_num

z = 0.63938, p-value = 0.5226
alternative hypothesis: true tau is not equal to 0
sample estimates:
tau
0.05565111
Figure 12. Source: RStudio Output (Author’s Compilation)
Interpretation: The correlation coefficient is 0.0556511 shows a weak and positive
relationship . As p-value = 0.52 > 0.05 shown in Figure 12 indicates that there is no significant
relationship between Age and Holding Period at 5% level of significance. Therefore we
conclude that the null hypothesis is failed to be rejected. Younger and older may have similar
holding strategy led by herd behaviour or market conditions

Kruskal-Wallis rank sum test

H0: There is no difference in Confidence across Experience levels

H1: There is significant differences

Kruskal-Wallis rank sum test

data: Confidence_num by Experience

Kruskal-Wallis chi-squared = 4.9595, df = 3, p-value = 0.1748
Figure 13. Source: RStudio Output (Author’s Compilation)

Interpretation: The test statistcs value (df=3)= 4.9595 ,p>0.5 i.e 0.1748 > 0.05 shown in
Figure 13 indicates that there is no difference in Confidence across Experience levels at 5%
level of significance . Therefore we conclude that the null hypothesis is failed to be rejected.
Males and females rates risk are similarly across levels .This signifies experience doesn’t
shape confidence ,newbies and experienced feel similarly about the IPO market among the
respondents.

Wilcoxon Rank Sum Test

H0: There is no difference in Risk Perception between SME IPO investors and non-investors

Wilcoxon rank sum test with continuity correction

data: Risk_Perception_num by SME_IPOs

W = 1392, p-value = 0.2435
alternative hypothesis: true location shift is not equal to 0
Figure 14. Source: RStudio Output (Author’s Compilation)

Interpretation: Wilcoxon test statistic = 1392 , p-value = 0.24 > 0.05 shown in Figure 14
indicates that there is significant difference in Risk Perception based on SME IPO investment
at 5% level of significance . Therefore we conclude that the null hypothesis fails to reject,
Investing in SME IPOs do not alter risk perception ,thus both group views IPO risk similarly.
Findings :
This analysis evaluated the performance of Indian IPOs with short and long term returns over
the past decade along with investor perception collected from a survey of 101 participants .
1. Using the data gathered from the sources like the National Stock Exchange (NSE) and
Securities Exchange Board of India (SEBI) and comparing the listing gains and returns
in both longer and short period ,this helped to know that the primary motive of the
investors was listing gains or short term returns which overinflated the demand leading
to be overvalued but eventually was not able to sustain gains .

2. It also examined the sector wise IPO performance like technology sector and
pharmaceutical sector out performed which was also boosted due to COVID 19 rise in
demand but others struggled .

3. So , it tells us that long term sustainable and consistent gains depends on the
companies fundamental and demand in sector , but short term speculation only drives
initial success which doesn’t lasts longer .

4. 79.2% were male and 20.8% were females of 101 respondents and this group of
respondents showcases that gender do not influence the risk perception , it could be
due to small sample size

5. There was a wide range of ages represented in this survey where in , 57.4% were 18-
25 in between, 26-35 were 17.8% in between, 36-50 were 14.9% in between and 9.9%
other extreme ends. This showcases young participation in Indian IPOs .

6. 50.5% of the respondents were students , 5% of the respondents were unemployed ,

13.9% of the respondents were Self employed , 21.9% of the respondents were Full
time employed and 8.9% of the respondents were Part time Employed .

7. When asked about their monthly income ,44.6% of them said it was less than ₹15,000,
19.8% of them said it was in between ₹15,000 - ₹40,000 as well as ₹40,000 - ₹80,000
and 15.8% of them said it was above than ₹80,000 which was affected due to higher
stundent participation leading to lower income .

8. Participation in IPOs was lead by the respondents living in Tier 1 cities which was
around 2/3rd and Tier 2 and 3 cities had around same number of respondents.

9. Respondents experience in investing in IPOs for less than 3 years was around 76%
which showcases that the IPO market has boomed in the last couple of years especially
post-COVID which was also accompanied by steep rise in opening of demat accounts.
10.
Conclusions :
Indian IPO market has raised capital which would second in the terms of amount but first in
terms of number of companies . This significant expansion over couple of years was led by
extensive retail participation and sustaining and consistent economic conditions. IPOs are
used to raise money for the companies where in people invests and as per demands , market
sentiment and other factors listing gains are determined .However the long term returns are
generally influenced by companies fundamental and the sectoral performance. Moreover,
macroeconomic factors such as interest rates, inflation, and GDP growth directly impacts the
IPO market, influencing both investor confidence and market performance
Secondary data analysis potraited that why generally IPOs are listed at a premium rates and
was not able to sustain that and declined after wards. It also showcased about the sectoral
performance of companies raising capital through IPOs
Primary data analysis indicated the crucial role that behavioural finance plays in IPO
investment decisions. It concluded with its findings that retail investors gets influenced by
herd mentality , market trends or social media rather than focusing and depending on
financial analysis . Short sightedness is showcased since people are speculating for listing
gains rather than investing in it. Moreover, this study highlighted the significant challenges
which was faced by investors in the IPO process, including lack of transparency in allotment,
issues with broking platforms, and delays in fund settlement.

Suggestions :
There may be several measures that can be taken to improve the overall Indian IPO market
such as follows :
 IPO’s price band must adhere to the companies fundamentals which will ensure that it
is not affected by the hype and transparent pricing could be achieved
 Financial literacy seminars or webinars could be used to make retail investor
understand the risks and strategies which would lead to better decisions.
 Transparent allotment process would enhance investor confidence and market
participation.
 Implementation of tighter disclosure norms and oversight mechanisms to protect
investors from misleading IPO valuations and fraudulent practices by SEBI.
Recommendations :
Investors
o They should not rely on GMP or take it as a criteria to invest rather than visioning for
long term returns which might be identified by doing fundamental analysis
o Over reliance on IPO investments as their main source of investing should start
considering diversifying its portfolio and mange its risk.
o Investors must opt for a trusted brokerage firms or a SEBI registered investment
advisors to ensure smooth IPO applications and minimal risks relateing to the
allotment process.

Companies
o They should publish well accounted and audited and honest financial reports in their
IPO prospectus to help investor take informed decisions.
o A good set of underwriters may help in strategizing for pre IPO marketing which
mainly focuses on business fundamentals rather than hype that creates uncertainty and
reduce speculative demand.
o A balance must be maintained while pricing since overpricing leads to post listing
declines, while underpricing results in losing capital .

Regulators
o They have to encourage domestic and foreign institutional investor to invest in IPOs
to reduce volatility and enhances the market sentiment .
o The criteria to raise capital through IPOs could be harsher to ensure that only strong
fundamentals company could raise
o Allocation process could be made more transparent by ensuring that disclosure about
the process and allotment probability be there .