ANALYSIS OF PERFORMANCE OF RECENT SME IPOS LISTED ON NSEx AND BSEx

Abstract

This research paper is specifically aimed at study of the performance of recent Initial Public Offers (IPOs) of Small and Medium Enterprises (S.M.E.) boarded on the National Stock Exchange (N.S.Ex.) and Bombay Stock Exchange (B.S.Ex.) during a carefully selected recent time-period. Let us think of high compliance and cost involved in normal listing of an IPO on any exchange. The introduction of a specially designed listing platform on each of the two major exchanges has provided comparative ease of fund raising from public and also providing liquidity in trading of such stocks on major exchanges. The fund-raising cost of these companies has lowered because of such specific listing arrangement in comparison to main board listing. Such a special facility has also provided opportunities for the investors to go for investing in more IPOs because main board IPOs are less frequent than smaller IPOs. Therefore, more companies can now afford to list and a number of S.M.E. IPOs came up in the market each year to board for listing on the exchanges. S.M.E. IPOs are also becoming popular as it increased the chances of getting allotment of a new issue of shares for various investors whether retail category, High Net Worth (HNI) category or any other category of interested buyer of new shares. At this instance, there arise a common research question in respect of these public offers, whether such offers to public still remain attractive and high rewarding and pour magical gains. Our analysis incorporates the average first-day gain or negative gain (loss) of S.M.E. IPOs which have got listed on the two exchanges during the specific time-period selected by us. A comparative analysis has also been performed to know whether one company issue on one exchange has any comparative advantage or different returns in comparison to the other exchange. Capital is one of the factors in limited quantity. It is always viable and prudent to invest money in those IPOs alternatives which have greater chances of allotment as well as pour attractive returns. Statistical analysis has been made for assessing the performance of IPOs under analysis with respect to the listing first day gains or negative gains and further comparative analysis has been made between S.M.E. IPOs on N.S.Ex. and B.S.Ex. by applying various statistical tools. Updated secondary data available on the public database on websites of N.S.Ex. and B.S.Ex. has been used for our analysis and own calculations have been made for statistical analysis using spreadsheet software and SPSS Data analysis software of I.B.M.