IPOs as Catalysts for Retail Investor Wealth Creation: Evidence from the Indian Stock Market

Autor: Mohammed Mujahed Ali, Shaik Masood
Jazyk: angličtina
Rok vydání: 2024
Předmět:
Zdroj: Australasian Accounting, Business and Finance Journal, Vol 18, Iss 3, Pp 248-268 (2024)
Druh dokumentu: article
ISSN: 1834-2000
1834-2019
DOI: 10.14453/aabfj.v18i3.13
Popis: The study delves into the dynamics of wealth creation for retail investors in the context of Initial Public Offerings (IPOs) within the Indian equity markets. Against the backdrop of a burgeoning retail investor base, the research offers a comprehensive analysis spanning April 2012 to December 2022, evaluating short-term and long-term IPO performance metrics. The study reveals nuanced insights into wealth creation dynamics by scrutinizing listing day returns, firstweek to third-year returns, and market-adjusted returns vis-à-vis the Nifty50 Index. Notably, the research suggests that while IPOs exhibit promise with positive listing day returns, sustaining growth over extended horizons poses challenges. The hypothesis of inflation serving as a pragmatic hurdle rate for retail investors is explored, offering a novel perspective on wealth preservation. It also sheds light on the significant variability in the Real Rate of Returns (RRRs) among IPOs, with some contributing to wealth generation while others result in wealth erosion. This underscores the importance of retail investors carefully assessing and managing risks, emphasizing the need for prudent portfolio diversification and effective risk mitigation strategies, particularly over longer investment horizons.
Databáze: Directory of Open Access Journals