Under-pricing and Post-listing Performance of Indian IPOs: An Empirical Study using NIFTY 500 Benchmark

Abstract

This study examines the under-pricing and post-listing performance of Indian initial public offerings (IPOs) listed during 2020–2024, using the NIFTY 500 as the market benchmark. It adopts an empirical, quantitative and analytical design based on a structured dataset of 202 IPOs. Listing-day under-pricing and post-listing performance over 30-day, 180-day and 365-day horizons are evaluated using descriptive statistics, a one-sample t-test and paired-sample t-tests. The sample exhibits statistically significant listing-day under-pricing, with an average listing return of 21.64 per cent. Raw post-listing returns remain positive across all three horizons; however, the differences between IPO returns and corresponding NIFTY 500 returns are small and statistically insignificant. The analysis is limited to the IPOs and variables included in the final research dataset and does not incorporate qualitative determinants such as underwriter reputation, anchor-investor participation and grey market premium. The results support a listing-gain interpretation of IPO participation more strongly than persistent aftermarket alpha. The evidence is relevant to investors, issuers, lead managers and regulators concerned with efficient issue pricing and informed market participation. The paper contributes to contemporary Indian evidence by jointly analysing under-pricing and benchmark-adjusted post-listing performance for the 2020–2024 IPO cycle using a broad market proxy.