An Investigation into IPO Anomaly in the Indian Capital Market

Abstract

This article provides a look at the "Under Pricing" IPO phenomenon that happened in the Indian capital market between April 2016 and March 2024. To identify the components that contribute to under-pricing, stepwise regression was used. In terms of adjusted R², the results produced in this investigation are rather ahead of the prior empirical findings. Author discovered that issues price, market rate of return, degree of oversubscription, and post-issue promoter holding account for 52.2% of under-pricing, among other important aspects. It is possible that the changes in the institutional and regulatory framework of the Indian Capital Market are to blame for the change in the level and causes of under-pricing. Policymakers, market intermediaries, and individual investors may all benefit greatly from this paper's conclusions.