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8 Short-Run Pricing Performance of Selected Indian IPOs During COVID-19 for Alternative Investment Avenue

  • Kapil Shrimal , Nidhi Solanki and Cs. Priyanka Mathur
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Sustainability, Green Management, and Performance of SMEs
This chapter is in the book Sustainability, Green Management, and Performance of SMEs

Abstract

Small and Medium Enterprises (SMEs) act as a backbone for income generation in the economic growth of India. The new edge of funds generation in small and medium companies through public offering has been reasonably emerging, and the growth of SME IPOs in the secondary market has been extremely good. It can be noticed that numerous IPOs experience a quick surge in their trading prices on the day they are listed. Newly issued stocks often conclude their first trading day at a significantly higher price than their initial offering price. The present study examines the pricing and performance of SME IPOs issued on Indian Stock Exchanges for Alternative Investment Market (AIM) during the COVID-19 duration of two years, from 1st January 2020 to 31st December 2021. The aim of the research is to analyze the returns generated by BSE SME IPOs on the day of listing, in addition to the returns offered by the BSE SME IPO Index. A total of 87 SMEs have issued IPO during this period, and for the present study, 84 companies’ data are taken as a sample based on the availability of data. The study of SME IPOs holds practical significance for investors in making informed decisions, for issuers in monitoring IPOs as a fresh source of investment, and for regulators in ensuring compliance with due diligence. The results showed that there is no significant effect of independent variables, i.e. Issue Size and Issue Price, on the dependent variable MAER (Market Adjusted Excess Return) during the Covid-19 pandemic.

Abstract

Small and Medium Enterprises (SMEs) act as a backbone for income generation in the economic growth of India. The new edge of funds generation in small and medium companies through public offering has been reasonably emerging, and the growth of SME IPOs in the secondary market has been extremely good. It can be noticed that numerous IPOs experience a quick surge in their trading prices on the day they are listed. Newly issued stocks often conclude their first trading day at a significantly higher price than their initial offering price. The present study examines the pricing and performance of SME IPOs issued on Indian Stock Exchanges for Alternative Investment Market (AIM) during the COVID-19 duration of two years, from 1st January 2020 to 31st December 2021. The aim of the research is to analyze the returns generated by BSE SME IPOs on the day of listing, in addition to the returns offered by the BSE SME IPO Index. A total of 87 SMEs have issued IPO during this period, and for the present study, 84 companies’ data are taken as a sample based on the availability of data. The study of SME IPOs holds practical significance for investors in making informed decisions, for issuers in monitoring IPOs as a fresh source of investment, and for regulators in ensuring compliance with due diligence. The results showed that there is no significant effect of independent variables, i.e. Issue Size and Issue Price, on the dependent variable MAER (Market Adjusted Excess Return) during the Covid-19 pandemic.

Chapters in this book

  1. Frontmatter I
  2. Preface V
  3. Contents VII
  4. Introduction IX
  5. 1 Enhancing SMEs’ Sustainability Through Innovative Practices 1
  6. 2 The Approach of SMEs Towards Green Management Practices 17
  7. 3 Factors Influencing Financial Backers’ Exit Decisions from a New Venture 33
  8. 4 Technological Advancement in Industrial Revolution 4.0 for Sustainable Development of India: Understanding Linkages in Theory and Practice 57
  9. 5 Impact of Macroeconomic Determinants and Corporate Attributes on Firms’ Financial Success in India 73
  10. 6 Exploring Individual Investor Intentions Towards Socially Responsible Investment 95
  11. 7 Ownership Structures and Performance of SMEs: An Empirical Analysis 119
  12. 8 Short-Run Pricing Performance of Selected Indian IPOs During COVID-19 for Alternative Investment Avenue 141
  13. 9 Emerging Green: Exploring Strategic Factors for SMEs’ Adoption of Green Technology and Innovation in India 165
  14. 10 Impact of Sustainability and Green Finance on SMEs to Promote Green Growth 187
  15. 11 Progress Intention and Sales Revenue Growth in Micro, Small and Medium Enterprises (SMEs) 199
  16. 12 Green Management Practices by Small and Medium Enterprises 211
  17. 13 An Analysis of MSMEs’ Contributions to the Promotion of SDGs in India 227
  18. 14 Impact of Innovation and Its Role in Small Medium Enterprises’ Sustainability 247
  19. 15 Effect of Government Policies on SME Innovation and Entrepreneurship 267
  20. 16 A Study on Various Aspects of SMEs’ Orientation for Corporate Social Responsibility 285
  21. 17 SME and Environmental Sustenance: Digital Marketing in SMEs via Data- Driven Strategies 315
  22. List of Contributors 333
  23. About the Editors 339
  24. List of Tables 341
  25. List of Figures 343
  26. Index 345
https://doi.org/10.1515/9783111170022-008

Chapters in this book

  1. Frontmatter I
  2. Preface V
  3. Contents VII
  4. Introduction IX
  5. 1 Enhancing SMEs’ Sustainability Through Innovative Practices 1
  6. 2 The Approach of SMEs Towards Green Management Practices 17
  7. 3 Factors Influencing Financial Backers’ Exit Decisions from a New Venture 33
  8. 4 Technological Advancement in Industrial Revolution 4.0 for Sustainable Development of India: Understanding Linkages in Theory and Practice 57
  9. 5 Impact of Macroeconomic Determinants and Corporate Attributes on Firms’ Financial Success in India 73
  10. 6 Exploring Individual Investor Intentions Towards Socially Responsible Investment 95
  11. 7 Ownership Structures and Performance of SMEs: An Empirical Analysis 119
  12. 8 Short-Run Pricing Performance of Selected Indian IPOs During COVID-19 for Alternative Investment Avenue 141
  13. 9 Emerging Green: Exploring Strategic Factors for SMEs’ Adoption of Green Technology and Innovation in India 165
  14. 10 Impact of Sustainability and Green Finance on SMEs to Promote Green Growth 187
  15. 11 Progress Intention and Sales Revenue Growth in Micro, Small and Medium Enterprises (SMEs) 199
  16. 12 Green Management Practices by Small and Medium Enterprises 211
  17. 13 An Analysis of MSMEs’ Contributions to the Promotion of SDGs in India 227
  18. 14 Impact of Innovation and Its Role in Small Medium Enterprises’ Sustainability 247
  19. 15 Effect of Government Policies on SME Innovation and Entrepreneurship 267
  20. 16 A Study on Various Aspects of SMEs’ Orientation for Corporate Social Responsibility 285
  21. 17 SME and Environmental Sustenance: Digital Marketing in SMEs via Data- Driven Strategies 315
  22. List of Contributors 333
  23. About the Editors 339
  24. List of Tables 341
  25. List of Figures 343
  26. Index 345
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