Factors affecting IPO Performance in the Stock Market: An Analytical Perspective

Abstract

Initial Public Offerings (IPOs) have long been considered a crucial step in a company'sgrowth trajectory. IPOs offer an opportunity for companies to raise capital and expand theirbusiness operations. However, the success of an IPO is not guaranteed, and several factorscan impact its performance in the stock market. This study seeks to explore the factors thatcan affect IPO performance from an analytical perspective. The economic conditionsprevailing at the time of an IPO can have a significant impact on its performance. Factorssuch as inflation, interest rates, and GDP growth can influence investor sentiment and, inturn, impact IPO performance. Similarly, industry-specific factors such as competition,technological changes, and regulatory changes can also impact IPO performance. Companyspecific factors such as financial performance, management quality, and growth potential canalso play a critical role in determining IPO success. Furthermore, the regulatory environmentsurrounding IPOs, including legal and compliance requirements, can affect investor sentimentand the success of an IPO. Through an analytical approach, this study aims to identify andanalyse the critical factors that can impact IPO performance in the stock market. The researchcan provide valuable insights into the underlying mechanisms driving IPO performance andcan be useful for investors, issuers, and policymakers in making informed decisions regardingIPO investments and regulations.