A SYNOPSIS

ON
INVESTMENT IN INITIAL PUBLIC
OFFERING

K.AJAY KUMAR
(131218672122)
 CHAPTER PLAN

1.Introduction

2.Need for the study

3.Scope of the study

4.Objectives of the study

5.Research methodology

6.Limitations of the study

 INTRODUCTION

An initial public offering(IPO) or stock market launch is a type of public

offering where shares of stock in a company are sold to the general public
for the first time.

This is done by offering those shares to the public, which were held by the
Promoters or the private investors.

This is why doing an IPO is also referred to as “going public”.

IPO’s are often issued by similar, younger companies seeking capital to

expand, but can also be done by large privately-owned companies looking
to become publicly traded.
 NEED FOR THE STUDY

 IPO’s are often looked upon as a speculative opportunity to earn abnormal

profits on the listing day.

Companies which decide to go public face the added pressure of the market
which may cause them to focus more on short-term results rather than long-
term growth.

The actions of the company's management also become increasingly

scrutinized as investors constantly look for rising profits.

 This may lead management to perform somewhat questionable practices in

order to boost earnings.
 SCOPE OF THE STUDY

 In this study attempts are made to discover in general the rates and trends
of returns both in short run and long run on sampled IPOs listed on India’s
Premier Stock Exchanges.

 The study will be useful to the Investment Bankers in deciding the issue
price of the IPOs.

 It will also be useful to the investors in deciding whether or not to invest in

a particular IPO on the basis of its price.

 The study will also be useful to the Securities and Exchange Board of India
and Government in making policies and issuing guidelines in future
regarding IPOs.
 OBJECTIVES OF THE STUDY

 To find out the performance of Indian IPOs for short period, i.e. from the
date of offer to the public to the date of their first day of trading after listing
on stock exchange.

 To measure the long term performance of Indian IPOs including and

excluding initial returns.

 To analyze whether the returns are more in short term or long term for better
conclusion.
 RESEARCH METHODOLOGY
Descriptive Research:
Descriptive research is used to obtain information concerning the current
status of the phenomena to describe “what exists” with respect to variables or
conditions in a situation.
Descriptive research also known as statistical research, describes data and
characteristics about the population or phenomenon being studied.
Descriptive research answers the questions who, where, what, when and
how.
Analytical Research:
Analytical research takes a descriptive research one stage further by seeking
to explain the reasons behind a particular occurrence by discovering casual
relationships.
Once casual relationships have been discovered the search then lifts to
factors that can be changed (variables) in order to influence the chain of
causality.
 LIMITATIONS OF THE STUDY

This study aimed at analyzing the performance of IPO both in primary market
and secondary market.

Investment tools like the Raw Returns, Market Adjusted Excess Returns is
used to analyze both the short term and the long term performance.

It is important for the investors to analyze the trend of IPO stocks to make
informed decisions.

The results show that there are few companies that offered higher returns in
the primary market and sold in the secondary market, whereas there is only one
company which gives higher returns in the primary market and one company
which gives higher returns in the secondary market.
THANK YOU