A Study on Listing Day Price Performance of BSE SME IPOs and its Determinants
DOI:
https://doi.org/10.17010/ijf/2020/v14i5-7/153324Keywords:
Small and Medium Enterprises
, Initial Public Offering, Underpricing, Listing Day Returns, Lead Manager Reputation.JEL Classification
, G1, G2, G10, G14, G15, G21, G23.Paper Submission Date
, October 17, 2019, Paper Sent Back for Revision, April 25, 2020, Paper Acceptance Date, May 15, 2020.Abstract
SME exchange is a relatively new platform of raising equity finance in India. A lot of research has been done on IPOs, but there is a dearth of literature on SME IPOs in India. This paper aimed to fill this research gap, to some extent, by addressing the following questions : What is the listing day price performance of BSE SME IPOs ? Are BSE SME IPOs underpriced or overpriced ? What are the factors that determine the BSE SME IPO returns on the listing day ? The study focused on a sample of 176 BSE SME listed IPOs of equity shares issued by small and medium enterprises during the period from February 23, 2012 – March 31, 2017. The results showed that on an average, SME IPOs provided positive returns of 8.66% on the listing day. Age, subscription, issue price, listing delay, market sentiment, and financial & construction sector dummies had a significant impact on listing day price performance of SME IPOs. An important implication of the study is that it supports SEBI’s initiatives to reduce the issue listing time.Downloads
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