Ipo Market- a Common Investor Wealth Erosion

Abstract

Investing money in initial public offerings with the objective of having long term is not an easy task for the investors. Instead of locking up your money with the application and waiting/or the listing of the scrip, it is better to purchase a share from the market. This is because of the fact that long term returns for which investor is invested his hard earned money almost disappeared. The sample consists of 48 IPOs issued by companies in the Indian market during the period from 2008 to 2012 . . From the table it clearly shows that about only .five companies has positive return since their listing. It also signifies that these companies are not able to sustain their issue price since their listing. If we look towards one year return it also shows that only eight companies are able to provide positive return. This clearly shows ineffectiveness of !PO pricing