Evidence of Under-Pricing Impact of Initial Return Determinants - A Case-Study on Public Issue of Shares in Indian Capital Market

The present study was carried out taking into consideration all the public issue in India during January 2017 to December 2017. From the 327 public issue that were listed on Bombay Stock Exchange (BSE) during the said period, it was observed that on an average, returns were positive on the listing day. This study also examined the share price performance on listing day to trace the evidence of underpricing. The result reveals the existence of underpricing on the first day of trading of public issue. Empirical findings also show that initial return determinants-issue size and issue price were unable to impact initial return. However, retail investor's oversubscription significantly impacted the first day returns from public issue