SHORT-RUN MARKET PERFORMANCE OF IPOs ISSUEDTHROUGH THE BOOK-BUILDING METHOD :EVIDENCE FROM THE BSE

The study focuses on the listing day & short-term performance of 29 small and medium-sized enterprises (SMEs) Initial Public offerings (IPOs) issued through the book-building method and listed on the Bombay Stock Exchange (BSE) SME IPO board in 2024. It analyses both listing day return, and examines short-term return at one, three, and six months after listing. In order to decouple the performance of individual IPOs and general market trends, the market-adjusted abnormal return (MAAR) was computed and determined whether IPOs were underpriced/overpriced IPOs. The study adopts an analytical and descriptive research design; secondary data collected from BSE, using a purposive sampling method, 29 IPOs were selected for the study. The results indicate that there is significant underpricing during the listing day, where 26 of 29 IPOs are underpriced on the listing day, and returns vary between -1.91 percent to 99.5 percent. The performance after one, three, and six months indicates significant instability in the short-term performance of SME IPOs. MAAR analysis indicates that there is a strong positive abnormal performance in most IPOs in the listing and short-term though the gains decrease with time. Findings indicate the existence of underpricing in SME IPOs and the instability of short-term post-listing returns.