IPO PERFORMANCE IN THE SHORT-RUN: EVIDENCE FROM BOMBAY STOCK EXCHANGE

Abstract

Initial Public Offerings (IPOs) mark an important shift for companies. They allow firms to raise money by transitioning from private to public ownership. While researchers have studied IPO pricing and long-term returns, there is little research on short-term IPO performance in India, especially on the Bombay Stock Exchange (BSE). This study fills that gap by looking at the short-term performance of 301 IPOs listed on the BSE from 2021 to 2023. It uses the Market Adjusted Excess Return (MAER) method. The analysis compares IPOs in the secondary and tertiary sectors, explores sector-specific trends, and examines the link between MAER and issue price through Karl Pearson’s correlation. The results show that secondary sector IPOs usually perform better in terms of MAER and average listing gains. However, there is no statistically significant correlation between MAER and issue price. The findings offer valuable insights for IPO literature, highlighting investor risk-return trade-offs and suggesting implications for investment strategies, regulatory policy, and market efficiency.”