Analyzing Retail Investor Reactions to IPOs: Balancing Initial Hype and Long-Term Performance.

The following study looks at how Indian retail investors respond toward IPOs, along with accounting for stock performance later on in addition to the phenomenon of initial market euphoria. The purpose of this study is to determine if retail investors act rationally or give in to speculative passion through an analysis of many past initial public offerings (IPOs), investor sentiment, and specific financial measures. The majority of initial public offerings (IPOs) see large opening-day price returns, according to the study. However, extended long-term performance is below expectations. Retail investor participation comes as a result of several behavioral biases, along with herd mentality, overconfidence, as well as FOMO. To better encourage the many investors throughout the IPO markets toward their making quite well-informed decisions, the paper ends with several suggestions regarding investor education and certain regulatory measures.