An Introspection into IPO Pricing and Post-listing Performance of Indian Fintech Companies

Abstract

The study examines the extent of initial public offering (IPO) underpricing of the Fintech companies and compares the same with the non-Fintech companies. The study also conducts post-listing performance of Fintech companies using listing gains, profitability margin, and valuation multiple over 3 years. The overall study, which spans from 2007 to 2022, indicates that the extent of IPO underpricing of Fintech companies is marginally higher than that of the non-Fintech companies. The results reveal that investors suffered a drip in the listing gains during the post-listing period. Further, during the post-listing phase, the Fintech companies have been able to post a continuous profit and also could sustain with a steady valuation multiple. The findings of the study postulate that the Fintech companies need to focus on implementing the right strategies to reduce the uncertainty and discontent among the investing community. Thus, the companies need to look forward to building up investor confidence in the upcoming days with improved performance. The significant implication of the study brings out that the policymakers need to contemplate framing norms for eradicating discontent and instilling confidence in the investors toward the Fintech companies over a longer time horizon of the primary market investment.