Assessing the Performance of Initial Public Offerings (IPOs) in Indian Stock Markets: A Longitudinal Study from 2014-2023

Abstract

This research investigates the performance of Initial Public Offerings (IPOs) in the Indian stock market over a decade (2014-2023). The study aims to assess both short-term and long-term IPO returns and the factors influencing their performance. Using a quantitative, longitudinal approach, data was collected from the National Stock Exchange (NSE) of India, covering 500 IPOs. The analysis examines short-term listing day returns and long-term performance up to five years post-IPO, focusing on variables like firm size, market sentiment, and sector-specific dynamics. The findings reveal substantial variations in IPO performance, with average listing day returns ranging from 18.98% to 26.35%, particularly peaking during market volatility in 2020. However, long-term returns exhibit a decline, with many IPOs underperforming five years after listing. Regression analysis shows that firm size and market sentiment significantly affect IPO performance, with larger firms and favorable market conditions driving better outcomes. The technology and pharmaceutical sectors outperformed, while real estate IPOs lagged. The study highlights the importance of due diligence for investors and the need for continued regulatory reforms to improve market transparency and efficiency. This research fills a gap in the literature by providing a comprehensive, decade-long perspective on IPO performance in India.