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8/3/2019 Investors Perception on IPOs and Post Performance of IPOs During 2009
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Investors perception on IPOs and Post performance of IPOs during 2009-10"
Executive Summary
Towards the fulfillment of project program, a study was conduct to understand the
InvestorsPerception on IPOs and to analyze the post performance of IPOSs during 2009-10
Among various modes of raising fresh capital, the equity issue started gaining momentum
in India during early 1980s. It reached the peak during early 1990s. Many companiesmade
public issue during the year 2009-10. These companies raised funds by placing a highpremium
on the issue. Today most of these companies are trading below the expectation. The main
objective of this study is to analyze the Post issue performance of select IPOs issued in the year
2009-10, and to know the perception of the investors investing on IPOs.
The study is being done from the investors point of view based on criteria of certain
factors like issue price, listing price, and performance of these shares in a period of threemonths
after the listing. For the study, 8 companies with have been chosen . After a rigorous analysis of
each company it was found that majority of the companies were over priced and are now
generating negative returns atthe end of 3 month period.
This study also covers investors perception and preferences on IPOs. It was found from
the study that investors are happy with the performance of the IPOs in India. They invest in
IPOs with an objective of making quick money. Most of the respondents feel betterinvesting in
IPOs than investing on shares in secondary market, because they consider it is less risky
considered to trading on stocks in secondary markets. Most of the time investors get their
expected returns on the day of listing.
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CHAPTER no 1
Introduction
1.1Introduction:
The transition from being a private company to a public one is one of the most important
events in the life of a firm. It is also one of particular interest to institutional investors, and the
transition is facilitated through the initial public offering (IPO) process. The IPOprovides a fresh
source of capital that is critical to the growth of the firm and provides the founder and other
shareholders such as venture capitalists a liquid market for their shares.
From an institutional investor's perspective, the IPO provides an opportunity to share in
the rewards of the growth of the firm.
When a firm issues equity to the public for the first time, it makes an initial public
offering consisting of two kinds of issues the primary issue and the follow-on issue. In a
primary, the firm raises capital for itself by selling stock to the public, whereas in thefollow-on
issue, existing large shareholders sell to the public a substantial number ofshares they currently
own.
It is a well documented fact that IPO tend to be generally under-priced, though someissues tend to be overpriced. From the viewpoint of financial research, IPO under-pricingin the
sense of abnormal short-term returns on IPO has been found in nearly every country in the
world. This suggests that IPO under-pricing may be the outcome of basic problems of
information and uncertainty in the IPO process, and is unlikely to be afigment of institutional
peculiarities of any one market.
There have also been various studies made to suggest the reasons for such under pricing.
From the investors point of view, this under- pricing appear to provide the sure and
quickprofit that most dream about. Though first day return could vary, few of the issues tend to
provide a very high return over the first day. It is also seen that for some of the issues, the first
day returncould also be negative. It then becomes inevitable for most investors to measure the
performance of IPOs by the short term (usually within one week of issue), as the general
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scheme is to buy the shares at a low initial offering price and sell it the next day when the price
increases.
Pricing of the IPOs are done by the issuers with guidance from underwriters from
investment banks. There are various ways to price the stocks but what is commonly used now is
a process called book building. It is basically a capital issuance process used in an Initial Public
Offer which aids price and demand discovery. It is also a process used formarketing a public
offer of equity shares of a company. During the period for which thebook for the IPO is open,
bids are collected from investors at various prices, which areabove or equal to the floor price.
The offer/issue price is then determined by the issuingcompany after the bid closing date based
on the various bids that have been collected. Fora more detailed discussion of book building,
one can visit any of the many stockexchanges. An example of the book building process can be
seen from the National StockExchange. This Initial Public Offering can also be made throughthe fixed price methodor a combination of both book building and the fixed price method.
There have been various studies conducted on the price changes of the shares after
prolonged periods (six months to five years). These studies show that while the short-run
performance of IPOs is often quite impressive, the long-run performance over thesubsequent
three to five years is not as impressive. Excluding the initial-day return, IPOs tend to under
perform various benchmarks. However, these studies focus mainly ondeveloped economies and
tend to neglect the developing counterparts.
In some years there are a large number of IPOs while in some years, there are only a few
IPOs. When it is a vintage year with a large number of IPOs, most IPOs tend to do well on the
first day but tend to do poorly over a long term whereas in years when there are only a few
IPOs, the results tend to be mixed. The long run performance is likely to beaffected while we
include IPOs from different time periods because the market movements in different market
conditions are likely to be different. In order to see thatresults are not confounded by the time
period when IPO was issued, it was decided toinclude IPOs that were issued within a one-year
period.
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1.2Background Of The Study:
Advantages and Disadvantages of going public:
The Three Phases Of A Completed Initial Public Offering (IPO) Transformation
Process
While some large and successful companies are still privately-owned, many companies
aspire toward becoming a publicly-owned company with the intent to gain another source of
raising funds for operations. An initial public offering (IPO) represents a private company's first
offering of its equity to public investors. This process is generally considered to be very
intensive with many regulatory hurdles to jump over. While the formal process to produce the
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ADVANTAGES DISADVANTAGES
Stronger capital base Short-term growth pressure
Increases other financing prospects Disclosure and confidentiality
Better situated for making acquisitions Costs - initial and ongoing
Owners risk diversification Restrictions on management
Executive compensation Loss of personal benefits
Increase company and personalprestige
Trading restrictions
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IPO is well documented and as a result is a fairly well-structured process, the transformational
process of which a company changes froma private to a public firm is a much more difficult
process.
A company goes through a three-part IPO transformation process:
A. A pre-IPO transformation phase,
B. An IPO transaction phase and
C. A post-IPO transaction phase.
A. A pre-IPO transformation phase:
It can be considered to be a restructuring phase where a company starts the groundwork
toward becoming a publicly-traded company .For example, since the main focus of public
companies is to maximize shareholder value, the company should acquire management that has
experience in doing so.
Furthermore, companies should re-examine their organizational processes and policies
and make necessary changes to enhance the company's corporate governance and transparency.
Most importantly, the company needs to develop an effective growth and business strategy thatcan persuade potential investors the company is profitable and can become even more
profitable. On average, this phase usually takes around two years to complete.
B. The IPO transaction phase:
This usually takes place right before the shares are sold and involves achieving goals that
would enhance the optimal initial valuation of the firm. The key issue with this step is to
maximize investor confidence and credibility to ensure that the issue will be successful. For
example, companies can choose to have reputable accounting and law firms handle the for mal
paperwork associated with the filing. The intent of these actions is to prove to potential investors
that the company is willing to spend a little extra in order to have the IPO handled promptly and
correctly.
C. A post-IPO transaction phase:
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It involves the execution of the promises and business strategies the company committed
to in the preceding stages. The companies should not strive to meet expectations, but rather, beat
their expectations. Companies that frequently beat earnings estimates or guidance are usually
financially rewarded for their efforts. This phase is typically a very long phase, because this is
the point in time where companies have to go and prove to the market that they are a strongperformer that will last
Book Building:
SEBI guidelines defines Book Building as "a process undertaken by which a demand for
the securities proposed to be issued by a body corporate is elicited and built-up and the price for
such securities is assessed for the determination of the quantum of such securities to be issued by
means of a notice, circular, advertisement, document or information memoranda or offer
document".
Book Building is basically a capital issuance process used in Initial Public Offer (IPO)
which aids price and demand discovery. It is a process used for marketing a public offer of
equity shares of a company. It is a mechanism where, during the period for which the book for
the IPO is open, bids are collected from investors at various prices, which are above or equal to
the floor price. The process aims at tapping both wholesale and retail investors. The offer/issue
price is then determined after the bid closing date based on certain evaluation criteria.
The Process:
The Issuer who is planning an IPO nominates a lead merchant banker as a 'book
runner'.
The Issuer specifies the number of securities to be issued and the price band for
orders.
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The Issuer also appoints syndicate members with whom orders can be placed by
the investors.
Investors place their order with a syndicate member who inputs the orders into the
'electronic book'. This process is called 'bidding' and is similar to open auction.
A Book should remain open for a minimum of 3 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the 'book runner evaluates the bids on the
basis of the evaluation criteria which may include -
Price Aggression
Investor quality
Earliness of bids, etc.
The book runner and the company conclude the final price at which it is willing to
issue the stock and allocation of securities.
Generally, the numbers of shares are fixed; the issue size gets frozen based on the
price per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
How does an IPO get valued?
Initial public offerings (IPOs) are unique stocks because they are newly issued. The
companies that issue IPOs have not been traded previously on an exchange and are less
thoroughly analyzed than those companies that have been traded for a long time. Some people
believe that the lack of historical share price performance provides a buying opportunity, while
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others think that because IPOs have not yet been analyzed and scrutinized by the market, they
are considerably riskier than stocks that have a history of being analyzed.
Pricing:
Historically, IPOs both globally and in the US have been underpriced. The effect of
under pricing an IPO is to generate additional interest in the stock when it first becomespublicly
traded. This can lead to significant gains for investors who have been allocated shares of the IPO
at the offering price. However, under pricing an IPO results in "money left on the table"lost
capital that could have been raised for the company had the stockbeen offered at a higher price.
The danger of overpricing is also an important consideration. If a stock is offered to the
public at a higher price than the market will pay, the underwriters may have troublemeeting their
commitments to sell shares. Even if they sell all of the issued shares, if thestock falls in value onthe first day of trading, it may lose its marketability and henceeven more of its value.
Investment banks, therefore, take many factors into consideration when pricing an IPO,
and attempt to reach an offering price that is low enough to stimulate interest in the stock, but
high enough to raise an adequate amount of capital for the company. The process ofdetermining
an optimal price usually involves the underwriters ("syndicate") arranging share purchase
commitments from lead institutional investors.
A Brief introduction about last year IPOs:
More IPOs in 2009 but the shares trade below issue
price
Most companies that issued IPOs this year are seeing their
shares trade below the issue price. But size-wise, the offerings of
2009 have been larger than those in the previous year.
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A report by Prime Database says the average size of the IPOs this year rose to Rs 931
crore from Rs 445 crore in 2008 and Rs 426 crore in 2007.
The year 2009 saw as many as five issues of over Rs 1,000 crore each, and for the first
time the year did not witness any issue below Rs 10 crore, said the report.
The smallest IPO of the year was EdServ Softsystem's Rs 24-crore issue, while the
largest was NHPC's Rs 6,039-crore IPO.
This year only large- and medium-sized companies came out with their IPOs. Smaller
companies stayed away from the primary market, said Mr Prithvi Haldea, Chairman and
Managing Director of Prime Database.
Investors were cautious and went for IPOs of better known companies as risk appetite
remained low, he said.
Though only a few IPOs this year are trading above their issue prices, the deal sizes
remained of a good amount, said merchant bankers. The deal sizes remained big this year as the
all the IPOs of this year received good response. They were all completely subscribed. None of
the issues were rejected because of pricing, said Mr Haldea.
In 2009, there were 21 IPOs that raised Rs 19,535 crore. In 2008, 36 IPOs raised Rs
16,927 crore. In 2007, 105 IPOs mobilized Rs 34,179 crore.
This shows that the IPO market is headed for a revival and that there is an element of
confidence among the companies that went to market to raise money, said Mr Jagannadham
Thunuguntla, Head of Equity at SMC Capitals.
In 2009, we saw a number of power and infrastructure companies such as NHPC, JSW
Energy, Adani Power and India bulls Power tap the capital markets. Typically, these companies
are larger in size and their capital requirements are greater. Hence, the issue sizes of IPOs have
been larger, said Mr S. Ramesh, Chief Operating Officer, Kotak Investment Banking
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CHAPTER no -2
Literature review
The Post-Issue Operating Performance of IPO FirmsBharat a. Jain and omesh kini
The Journal of Finance, Vol. 49, No. 5, (Dec., 1994), pp. 1699-1726
We find that IPO firms exhibit a decline in post-issue operating performance, as
measured by the operating return on assets and operating cash flows deflated by assets, relative
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to their pre-IPO levels, both before and after industry adjustment. The decline in operating
performance of IPO firms, however, comes with a caveat. These firms exhibit high growth in
sales and capital expenditures relative to firms in the same industry in the post-IPO period. Thus,
the declining operating performance of IPO firms cannot be attributed to a lack of sales growth
opportunities or cutbacks in post-IPO capital expenditures. We also find that IPO firms whereentrepreneurs retain higher ownership generally demonstrate superior performance relative to
other issuing firms both before and after adjustment for industry effects. We find no relation
between post-issue changes in operating performance and initial returns at the IPO.
A Review of IPO Activity, Pricing, and Allocations
Jay r. Ritter and Ivo Welch
The Journal of Finance, Vol. 57, No. 4, Papers and Proceedings of the Sixty-Second
Annual Meeting of the American Finance Association, Atlanta, Georgia, January 4-6,
2002, (Aug., 2002), pp. 1795-1828
Our article seeks to review different explanations for the patterns in issuing activity,
underpricing, and long-run underperformance. But it also weighs in with our personal
perspective on issues that are still contentious. We believe that the time-variation in these
phenomena deserves more emphasis. For example, the long-run performance of IPOs is not only
sensitive to the widely debated choice of econometric methodology, but also to the choice of
sample period, as shown in Table I. Further, we argue that asymmetric information theories are
unlikely to be the primary determinant of fluctuations in IPO activity and underpricing,
especially the excesses of the Internet bubble period. Instead, we believe that specific nonrational
explanations and agency explanations will play a bigger role in the future research agenda. In
discussing theories of underpricing, we devote significant attention to the topic of share
allocations and subsequent ownership. In our view, how IPO shares are allocated is one of the
most interesting issues in IPO research today.
IPO post-issue markets: questionable predilections but diligent learners?
Peter Bossaerts and Pierre Hillion
The Review of Economics and Statistics, Vol. 83, No. 2, (May, 2001), pp. 333-347
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The post-issue performance of IPOs has been considered to be a puzzle. In the long run,
IPOs significantly underperform standard benchmarks or equity in appropriate matched firms.
The puzzle has been confirmed in numerous follow-up studies. (See, for example, the Spring
1993 issue of Financial Management, Jain and Kini (1994), and Loughran and Ritter, 1995.) The
evidence is now generally interpreted as suggesting that the market is too optimistic when pricingyoung issues. It realizes its mistakes slowly, adjusting prices as the issues mature. Although some
have argued that the biases in the market's prior at the issue date are a natural consequence of
shortsale restrictions (Miller, 1977; Morris, undated), it could also be a mere sign of the beliefs at
a particular point in time. Indeed, most studies focus on IPOs executed during the 1970 and
1980s. That priors over this period were biased does not necessarily imply irrationality, because
the bias was demonstrated to be there only ex post, that is, with the benefit of hindsight. Instead, it
seems much more fruitful to ask whether subsequent changes in the market's beliefs were rational.
If beliefs can be expressed in terms of the chance numbers of classical probability theory, we
know precisely what this means: changes should obey the rules of conditional probability (Bayes'
law).1 We will also take this to mean that the market knows the likelihood of the signals it
receives given the eventual fate of an issue (will it default?). We set out to test this weaker
restriction on market beliefs.
The Reality of IPO Performance: An Empirical Study of Venture-Backed
Public Companies
Yochanan Shachmurove
The City College of The City University of New York and the University of Pennsylvania
The incredible profits of Initial Public Offerings have often been emphasized in the
media as a popular investment for the public. This paper takes a few steps towards refuting such
an assertion by investigating the performance of 2,895 venture capital backed IPOs between
1968 and September 1998. The paper finds that it is incorrect to assume that investors demand
very high annualized and cumulative rates of return to compensate for the risks they are taking
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by financing ventures in different sectors of the economy. The mean rates of return are found to
be, in practice, very moderate, and often, negative.
Conclusion:
From the above literature review, it can be found that the investor perception has not been
considered for their study. So, in this context, it can be stated that the investor perception has been
taken into consideration to study the IPOs. An attempt has been made to bridge the gap between
investors perception and the actual of IPO
CHAPTER no -3
Research methodology
3.1 Statement of the problem:
The study was conducted to understand the investors perception on IPOs and to evaluate
the post performance of IPOs after their listing
3.2 Objectives of the study:
a. To study the investors perception about investment in IPO.
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b. To study the post issue performance of selected IPO made during 2009.
c. To know the factors which influence investors investment pattern.
d. To know the stock holding periods among investors
e. To know the strong source of information of IPOs to investors
f. To know the how often on an average an investor invest on an average in IPOs in year.g. To know which is the source of fund available to investor to go for IPOs
3.3 Need for study:
This study is conducted to analyze the post issue performance of few selected companies
that issued fresh equity capital during the year 2009-10.The performance of shares afterlisting
are considered. The companies are selected on the basis of its price/share.
The study on investors perception is confined only to IPO investors. The study is to
know whether the investors are satisfied with the IPOs or not, and to see whether the companies
are aiming at share holders wealth maximization.
The findings and conclusions of the study can be used by individual investors for
investing on new public issues
3.4 Research methodology:
In this study Exploratory Research will going to be used. Exploratory research helps
determine the best research design, data collection method and selection of subjects. Given its
fundamental nature, exploratory research often concludes that a perceived problem does not
actually exist. Exploratory research often relies on secondary research such as reviewing
available literature and data, or qualitative approaches such as informal discussions with
consumers, employees, management or competitors, and more formal approaches through in-
depth interviews, focus groups, projective methods, case studies or pilot studies.
Primary data will be collected through questionnaire and
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The secondary data will be collected from existing records, company manual,
published sources like annual reports, periodicals, statements etc. the data so collected
will be analyzed and interpreted.
3.5 Sampling method & size:
Sample Size: 100
Convenience sampling is used as a tool in this study. Convenience sampling is a type
of non probability sampling which involves the sample being drawn from that part of
the population which is close to hand. That is, a sample population selected because it
is readily available and convenient. The researcher using such a sample cannot
scientifically make generalizations about the total population from this sample
because it would not be representative enough.
This study has two parts:
1. IPO analysis
For IPO analysis secondary data has been collected from various sources. Most of the
data is obtained through internet sources and other publisher reports. Secondary data is the data
that are already available. Primary data is collected through questionnaire. The sample size is
100.
The quantitative financial data required for this study are listed below:
Face value, security amount, issue price, listing price.
Three months share prices after listing.
The daily returns for share prices and Sensex are calculated using the formulae:
Returns = (Closing Price Opening Price)
Opening Price
For the IPO analysis sample size is 8 companies. Here the top 8 companies which have
highest issue size have been chosen.
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The companies that have been selected are:
Company NameIssue Size
( in crores)
1 ADANI POWER LIMITED 2487.946812 EDSERV SOFTSYSTEMS LTD 23.843448
3 EXCEL INFOWAYS LTD 48.1695
4 JINDAL COTEX LTD 84.375
5MAHINDRA HOLIDAYS &
RESORTS INDIA LTD277.95825
6 NHPC LTD 6038.546454
7 RAJ OIL MILLS LTD 114
8RISHABHDEV
TECHNOCABLE LTD.22.61985
2. Investors perception on IPOs.
To know the investors perception about IPO a survey has been conducted on investors
who are interested in investing on IPO. This acts as first hand information which is being
collected from the investors. A questionnaire was used as a tool for collecting primary data. The
sample size of the study was 100 investors
3.6 Plan of analysis:
Statistical tools used ----CORRELATION and ANOVA test
a. Correlation:
Correlation analysis is the statistical tool that is used to describe the degree to
which one variable is related to the other. Frequently correlation analysis is used with the
regression analysis to measure how well the regression line explains the variations of the
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dependent variable. The correlation coefficient is the statistical tool that is used to
measure the mutual relationship between the two variables.
Karl Pearsons formula for correlation coefficient is given by
yxyyxxnr /))((/1 =
Where r is the sample correlation coefficient between x and y,
yxand are the standard deviations of x and y respectively.
))((/1 yyxxn is known as the covariance between x and y.
r is also called Pearsons product moment correlation coefficient.
It should be noted that r is a pure number without units or dimensions. Secondly
the numerical value of r lies between +1 and -1. Positive value of r indicate positive
correlation between the two variables x and y i.e., as x increases y will also increase or as
x decreases, y will also decrease, in short , movement of x and y is in the same direction.
Negative values of r indicate negative correlation, there by meaning an increase in
the value of one variable result in decrease in the value of other variable. A zero
correlation means no association between the two variables.
In this study correlation coefficient between the security price(x) and market index(y) are
calculated to measure the mutual relationship between the security price and the market
index. Based on the value of correlation coefficient (r) the association between the market
and security is predicted.
b. ANOVA:
The ANalysis Of VAriance (or ANOVA) is a powerful and common statistical procedure
in the social sciences. It can handle a variety of situations.
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The ANOVA is based on the fact that two independent estimates of the population
variance can be obtained from the sample data
A ratio is formed for the two estimates, where:
one is sensitive to treatment effect & error
between groups estimate
and the other to
error
within groups estimate
Given the null hypothesis (in this case HO: m1=m2=m3), the two variance estimates should
be equal. That is, since the null assumes no treatment effect, both variance estimates reflect error
and their ratio will equal 1. To the extent that this ratio is larger than 1, it suggests a treatment
effect(i.e., differences between the groups).
It turns out that the ratio of these two variance estimates is distributed as F when the null
hypothesis is true.
3.7 Limitation:
a. The study will be limited to the investors investing on IPOs and the sample size is
just 100. So generalization of results has its own limitations.
b. For the analysis of IPOs after listing only three months share prices will be
considered.
c. Time available for the study is limited.
CHAPTER NO- 4
COMPANY PROFILE
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Adani Group , a US $ 5 billion company based in Ahmedabad, is one of the fast growing
Business House of the country with diverse interest in global trading, development and operation
of Ports, IDC terminal, establishment of SEZ, Oil refining, logistics , gas distribution, Power
Generation, Power Transmission and Power Trading etc.
Adani Power Limited, a subsidiary of Adani Enterprises Limited, is developing number
of power projects along with its dedicated transmission station system. Presently, Adani Power
Limited is setting up a 4620 MW Mundra Thermal Power Station in following stages:
Stage 1: 660 MW
Stage 2: 660 MW
Stage 3: 1320 MW
Stage 4: 1980 MW
APL is presently executing 400 KV D/C transmission line of about 431 KM distance
from Mundra to Dehgam.
APL is also executing 500 KV Bi-Pole HVDC transmission line of about 800 KM
distance from Mundra to Haryana for transmitting 2500 MW.
Adani Power Maharashtra Limited (APML), an 85.89% subsidiary of Adani Power Limited
is implementing 1980 MW Thermal Power Station in following stages:
Stage 1: 1320 MW
Stage 2: 660 MW
Board of Directors:
Mr. Gautam S. Adani, Chairman
Mr. Rajesh S. Adani, Managing Director
Mr. Ameet H. Desai, Executive Director
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Mr. R.K Madan, Director
Mr. Vijay Ranchan, Independent Director
Mr. Surendra Kumar Tuteja, Independent Director
Mr. B. B. Tandon, Independent Director
Mr. Chinubhai R. Shah, Independent Director
Security Amount (Rs. crores ) 2487.94681
No. of securities 248794681
Security face value (Rs) 10
Price band (Rs) 90-100
Issue price (Rs) 100
Capital issue date 28-7-2009
Listing date 20-08-2009
Chart showing the price movement of the company from the day of listing:
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Incepted in 2001, EdServ is World's
first 4th generation education company that uses technology to efficiently synchronize
manpower demand and supply in number and skills right from development to deployment.
EdServ's business is web enabled and is run through a secured partner-driven center network in
Integrated Learning Model through its EdCenter brand. EdServ also provides academic support
programmes in-campus through its EdCademy brand. EdCampus, the jobs database engine, is
accessible to all EdCenters and EdCademys as well. EdServ came out with an IPO in February,
2009 and is currently listed in BSE and NSE, India's premier stock exchanges.
EdServ provides technology-led niche solutions in e-learning and placement seamlessly
integrating all benefiting communities viz., student, industry, institution, and partner.
EdServ recently launched the EdCademy Off-campus AE for students of Anna University
to help them pass exams easily. EdServ already signed up over 200 EdCenters (Learning and
Placement centers) in Tamil Nadu and Andra Pradesh through its POWER PARTNER model
and plans 1,000 EdCenters Pan India by Mar 2010. EdServ's EdCampus, the ONLINE
PLACEMENT CAMPUS, grows in job positions on an hourly basis by clients punching in
requirements all over in a private secured network controlled by LAMPS.
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EdServs is Indias only company to have seamlessly integrated education and placement
end-to-end in partner based web network. EdServ focusses on the bottom of the pyramid, the
Real India, the hugely recession-proof market having the continuous need of affordable
education and a career growth path and guidance. EdServ consolidated its presence in Tamil
Nadu as a principal job linked e-learning solution provider through partner driven network forthe masses growing significantly from 35 odd partner centers just before IPO to 130 by Mar
2009. The company also rolled out EdCampus, EdCademy, and EdCenters with EdClass during
the year that offer learning, jobs, metrics, and live lectures, online in-campus.
EdServ has launched in the year 2009, World's first 4th Generation education model that
has a definite job fitment for every aspirant who wishes to seek a career as a fresher. EdServ's
HEADS (Humanware Education and Deployment System) has education & deployment
integrated as part of the business model and promises an industry vetted, job linked, assessment
driven, resource mapped, and skill matched learning and placement for every registrant.
EdServ's next generation HEADS model consists of the 5 key cornerstones such as
CONTENT, DELIVERY, DEPLOYMENT, TECHNOLOGY, and BRANDING to build and
deliver centralized education to meet industry needs in terms of qualitative skills and scale
through innovative use of tools and technology to seamlessly integrate training, fool-proof and
transparent testing, metrics-based assessment and absorption of appropriately trained
humanware.
Security Amount (Rs. crores ) 23.843448
No. of securities 3973908
Security face value (Rs) 10
Price band (Rs) 55.00 - 60.00
Issue price (Rs) 60
Capital issue date 05-2-2009
Listing date 02-03-2009
Chart showing the price movement of the company from the day of listing:
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Excel Infoways Ltd:
Excel is a Leading Customer Contact Centre providing Voice Based Services in the areas
of Collections, Telemarketing and Customer Care.
Excel offer a range of customer care services including outbound sales and Marketing,
voice, email response, real-time chat, knowledge management, eCRM architecture and other
value added services. Since they have a readily available right pool of talented and skilled
technical consultants they can offer you the best consultants on project contract when and how
you need them most.
There is a continuous check of the quality of exchange between Excel operators and the
customers through silent monitoring, recording, and consumer surveys. The quality monitoring
team carries out frequent performance reviews of every agent against the parameters of
performance set at the beginning of each operation, such as, the average time per call, degree of
adherence to the script and to the product or service-specific information.
One of the criteria of incentives to Customer Relationship Representatives is through
their monitored performance. As required by the clients, realized performance measures are
summarized and provided in the form of timely reports.
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Excel has the resources, technology and operational expertise in place to help companies
expand globally and exceed their customer sales, services and marketing expectations.
Excel delivers unmatched business value to customers through a combination of process
excellence, quality frameworks and service delivery innovation.
A Solid Vision
Achieving our mission requires intelligent, energetic and committed people who possess the
following qualities:
We have the expertise to take care of your critical business processes through our
experience.
We inherit a rich legacy of offshore outsourcing experience, technology capabilities and
domain expertise which goes on to create a strong BPO value proposition for our
customers.
Chart showing the price movement of the company from the day of listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 24
Security Amount (Rs. crores ) 48.1695
No. of securities 5667000
Security face value (Rs) 10
Price band (Rs) 80.00 - 85.00
Issue price (Rs) 85
Capital issue date 14 Jul 2009
Listing date 03 Aug 2009
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Jindal Cotex Ltd:
Jindal Cotex Limited(JCL) is a flagship company of Jindal group of Ludhiana. Ludhiana
is an industrial hub of Punjab which is also known as Manchester of India.
The Jindal Group was promoted by SH. JAGDISH RAI JINDAL in 1977 with trading
business of iron and steel. From the time of its inception, Jindal Group has seen substantial
growth. Besides achieving high sales and turnover, the company has to its credit satisfied
customers and a loyal clientele in a short span of time. Although, Jindal Group achieved success
and recognition in a short period, the journey was challenging. Later the group formed its first
partnership concern in the year 1980 to manufacture and export bicycle and bicycle parts to
various countries.
Today Jindal Fine Industries is a prominent exporter of bicycle and bicycle parts with
exports to more then 40 Countries. The Group expanded its operation by way of backward
integration in the year 1994 by setting up a steel re-rolling plant for the manufacturing of rounds
and flat steels. In 1998, the Group diversified into textile business and promoted JINDAL
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COTEX LIMITED with the mandate of manufacturing of synthetic, cotton and blended yarns. At
its incorporation the company had an installed capacity of 7000 Spindles.
Today the capacity has increased multifold to the level of 24000 Spindles. Having
customer as the prime determinant, JINDAL consider 'Finest Quality' as our primary objective.
Jindal take pride in their accomplishments but at the same time compete with their own
standards to give their customers better quality everyday.
Security Amount (Rs. crores ) 84.375
No. of securities 11250000
Security face value (Rs) 10
Price band (Rs) Rs. 70.00 - 75.00
Issue price (Rs) 75
Capital issue date 27 Aug 2009
Listing date 22 Sep 2009
Chart showing the price movement of the company from the day of listing:
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Mahindra Holidays & Resorts India Ltd:
Mahindra Holidays & Resorts India Limited operates as leisure hospitality provider in
India. It provides family holidays primarily through vacation ownership memberships.
The company was founded in 1996 and is based in Chennai, India.The company offers its
members to choose to stay and holiday at its resorts, which offer the use of furnished
accommodation, such as apartments and cottages; and resort specific amenities and facilities,
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such as restaurants, ayurvedic spas, kids clubs, and various holiday activities. Its service
offerings include Club Mahindra Holidays targeted at the Indian family; Zest targeted at the
young urban families and is based on the concept of short break holidays; Club Mahindra
Fundays to corporate customers; and Mahindra Homestays targeted at overseas travelers.
The company also operates clubmahindra.travel, a dot travel Website for its members to
provide a shop for various travel-related services, such as holiday planning, ticketing, and other
related services. Mahindra Holidays has strategic alliances with Thailand Pathfinders Travel Pvt.
Ltd., Akqua Sun Holidays India Pvt. Ltd., and ICICI Lombard General Insurance.
Security Amount (Rs. crores ) 277.95825
No. of securities 9265275
Security face value (Rs) 10
Price band (Rs) Rs. 275.00 - 325.00
Issue price (Rs) 300
Capital issue date 23 Jun 2009
Listing date 16 Jul 2009
Chart showing the price movement of the company from the day of listing:
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NHPC LTD
NHPC Limited (Formerly known as National Hydroelectric Power Corporation Ltd.), A
Govt. of India Enterprise, was incorporated in the year 1975 with an authorised capital of Rs.
2000 million and with an objective to plan, promote and organise an integrated and efficient
development of hydroelectric power in all aspects. Later on NHPC expanded its objects to
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include development of power in all its aspects through conventional and non-conventional
sources in India and abroad.
At present, NHPC is a Mini Ratna Category-I Enterprise of the Govt. of India with
an authorised share capital of Rs. 1,50,000 Million . With an investment base of over Rs.
3,17,000 Million Approx. ,NHPC is among the TOP TEN companies in the country in terms of
investment.
Initially, on incorporation, NHPC took over the execution of Salal Stage-I, Bairasiul and
Loktak Hydro-electric Projects from Central Hydroelectric Project Construction and Control
Board. Since then, it has executed 13 projects with an installed capacity of 5175 MW on
ownership basis including projects taken up in joint venture. NHPC has also executed 5 projects
with an installed capacity of 89.35 MW on turnkey basis. Two of these projects have beencommissioned in neighbouring countries i.e. Nepal and Bhutan.
Mission :
To achieve international standards of excellence in all aspects of hydro power and
diversified business.
To execute and operate projects in a cost effective, environment friendly and socio-
economically responsive manner.
To foster competent trained and multi-disciplinary human capital.
To continually develop state-of-the-art technologies through innovative R&D and
adopt best practices.
To adopt the best practices of corporate governance and institutionalize value
based management for a strong corporate identity.
To maximize creation of wealth through generation of internal funds and effective
management of resources.
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vision:
A world class, diversified & transnational organization for sustainable development of
hydro power and water resources with strong environment conscience.
Security Amount (Rs. crores ) 6038.546454
No. of securities 1677374015
Security face value (Rs) 10
Price band (Rs) Rs. 30.00 - 36.00
Issue price (Rs) 36
Capital issue date 07 Aug 2009
Listing date 01 Sep 2009
Chart showing the price movement of the company from the day of listing:
Pioneering the Oil Industry in India
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RISHABHDEV TECHNOCABLE LTD was incorporated as a public limited company in
the year 1994 under the Companies Act, 1956 by Shri Bhanwar Lal Golchha, Shri Sunil Golchha
and Shri Kamal Chand Golchha. The registered office of the Company is situated at Goregaon,Mumbai and the manufacturing unit of the Company is located at Daman. Komet Wire Industries
Private Limited became a Subsidiary of Rishabhdev Company in 2002. In order to take
advantage of synergies existing in operations of both the companies, Komet Wire Industries
Private Limited was amalgamated with the company w.e.f April 1, 2004 in purusuance of the
order of the Honorable High Court of Bombay dated October 7, 2005. Rishabhdev Company was
initially engaged in trading of cables and thereafter diversified into manufacturing activities. The
business of company has grown considerably over the years and is presently one of the well-
known cable manufacturers in India.
Over the years, they have expanded their product range and have added variety of cables
in their product range like Industrial control cables, Hi- Tech- data cables, Process control
instrument signal cables, Thermocouple extension and Compensating cables, Computer
application, Hi- Bit rate networking cables, Digital data communication cables,Specialty cables
and Customized cables. With the objective of moving up the value chain they identified new
opportunities and are now diversifying into Electrical Low Voltage Power cables on a major
level. Pursuant to this objective they initiated a modernization cum expansion program in April,
2007. They now intend to set-up a separate manufacturing unit for control cables at Daman and
a separate manufacturing unit for Electrical Low Voltage Power cables at Silvassa apart from
expanding and modernizing manufacturing facilities at our existing unit at Daman.
At present, the Company manufactures cables up to 1.1 KV for various applications
covering most segments of users industries. They cater to a wide spectrum of cable users in
various industries like Power and Electrical Distributions and Transmission, Steel and Metal,
Cement, Mines and Minerals , Petrochemicals and fertilizers, Paper Mills and Fine chemicals,
Hydrocarbon Process Industries, Software Technology IT Park and infrastructure.
Rishabhdev Company is a regular supplier to many large corporates and well-known public and
private sector Undertakings. Our clients are from diverse industries and include large corporates
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such as Tata Power Company Ltd., Kalpatru Power Transmission Ltd., Reliance Industries Ltd.,
Grasim Industries Ltd., Century Enka Ltd., National Thermal Power Corporation Ltd, Welspun
Gujarat Stahl Rohren Ltd, Tata Steel Ltd., Siemens Ltd., Sanghi Industries Ltd., Adani Power
Limited, Johnson Controls India Pvt. Ltd., Nova Petrochemicals Ltd., Bhabha Atomic Research
Centre, Indian Navy and others.
Rishabhdev Company is BS EN ISO 9001:2000 certified by BSI, UK and also IS
694:1990, IS: 1554:1988 Part 1: 1988 by Bureau of Indian Standards.
COMPETITIVE STRENGTHS:
We believe that we are well positioned to sustain and strengthen our position in the
markets in which we compete as well as exploit significant growth opportunities that exist. We
believe the following are our core strengths.
Security Amount (Rs. crores ) 22.61985
No. of securities 6854500
Security face value (Rs) 10
Price band (Rs) Rs. 29.00 - 33.00
Issue price (Rs) 33
Capital issue date 04 Jun 2009
Listing date 29 Jun 2009
Chart showing the price movement of the company from the day of listing:
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CHAPTER NO- 5
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Table showing the daily Closing price of Adani Power Ltd for a period of 3 months
from the date of listing along with corresponding Sensex:
DateClosing
priceSENSEX Date
Closing
priceSENSEX
8/24/2009 102.8 15628.75 10/9/2009 101.25 16642.66
8/25/2009 102.55 15688.47 10/12/2009 101.6 17026.67
8/26/2009 104.65 15769.85 10/14/2009 101.7 17231.11
8/27/2009 104.4 15781.07 10/15/2009 100.1 17195.2
8/28/2009 103.9 15922.34 10/16/2009 100.1 17322.82
8/31/2009 102.65 15666.64 10/20/2009 100.35 17223.01
9/1/2009 100.9 15551.19 10/21/2009 100.05 17009.17
9/2/2009 100.95 15467.46 10/22/2009 99.95 16789.74
9/3/2009 100 15398.33 10/23/2009 100.35 16810.81
9/4/2009 99.1 15689.12 10/26/2009 99.55 16740.5
9/7/2009 100.75 16016.32 10/27/2009 97.95 16353.49/8/2009 101.4 16123.67 10/28/2009 97 16283.49
9/9/2009 103 16183.55 10/29/2009 95.5 16052.72
9/10/2009 102.2 16216.86 10/30/2009 97.25 15896.28
9/11/2009 103.35 16264.3 11/3/2009 95.8 15404.94
9/14/2009 102 16214.19 11/4/2009 93.55 15912.13
9/15/2009 101.4 16454.45 11/5/2009 91.1 16063.9
9/16/2009 101.3 16677.04 11/6/2009 92.2 16158.28
9/17/2009 101.3 16711.11 11/9/2009 93.1 16498.72
9/18/2009 101.1 16741.3 11/10/2009 94.5 16440.56
9/22/2009 101.6 16886.43 11/11/2009 94.05 16849.6
9/23/2009 101.4 16719.5 11/12/2009 94.8 16696.03
9/24/2009 101.05 16781.43 11/13/2009 93.1 16848.83
9/25/2009 100.8 16693 11/16/2009 92.05 17032.51
9/29/2009 101.85 16852.91 11/17/2009 92.35 17050.65
9/30/2009 102 17126.84 11/18/2009 94.3 16998.78
10/1/2009 102.3 17134.55 11/19/2009 93.1 16785.65
10/5/2009 101.25 16866.41 11/20/2009 93.2 17021.85
10/6/2009 101.2 16958.54 11/23/2009 95.8 17180.18
10/7/2009 101 16806.66 11/24/2009 95.8 17131.08
10/8/2009 101.4 16843.54
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Table showing weekly returns of Adani powers for a period of 3 months from date of
listing along with the corresponding Sensex returns:
WEEKSADANI POWERS
WEEKLY RETUNS
SENSEX WEEKLY
RETURN
1 1.070 1.879
2 -3.458 0.1433 2.581 1.548
4 -0.882 3.251
5 -0.787 -1.145
6 0.442 1.671
7 0.000 -1.327
8 -1.476 1.739
9 0.000 -2.393
10 -2.310 -5.043
11 -3.758 4.890
12 0.000 2.122
H0: There is no correlation between Adani Powers weekly returns and Sensex weekly returns.
H1: There is correlation between Adani Powers weekly returns and Sensex weekly returns.
Conclusion: There is low degree negative correlation, hence H1 accepted
Interpretation: The correlation between Adani Powers weekly returns and Sensex weekly
returns is r= -0.01729, it means that their performance is opposite way.
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r = -0.01729
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The following graph showing Sensex weekly returns versus Adani Power
Ltd weekly return for a period of 3 months from the date of its listing:
Inference:
From the above table it can be observed that the stock was closed at a premium on the
day of its listing. It was issued at a price of Rs 100 but is ended the day by Rs102.8 that is a
premium of 2.8%
The correlation between Sensex weekly return and Adani powers weekly returns is
0.0179 it shows a very low negative correlation between them. it means that their performancesome times opposite way
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WEEKS
EDSERV SOFTSYSTEMS
LTD.
WEEKLY RETURN
SENSEX WEEKLY
RETURN
1 -58.57771261 -3.267774902
2 -12.72123894 7.306136954
3 -21.69014085 0.258734237
4 -18.33648393 6.6263653945 5.109489051 8.159266064
6 10.35242291 2.553330036
7 -9.475806452 0.509427184
8 1.851851852 3.183660458
9 -5.437352246 0.27612042
10 -2.227722772 -2.128762438
11 -3.51758794 4.197812375
12 34.02061856 -2.779712704
13 -4.735883424 5.117650695
H0: There is no correlation between EdServ Soft systems Ltdweekly returns and Sensex weeklyreturns.
H1: There is correlation between EdServ Soft systems Ltd weekly returns and Sensex weekly
returns.
Conclusion: There is low degree positive correlation, hence H1 accepted
Interpretation: The correlation between EdServ Soft systems Ltdweekly returns and Sensex
weekly returns is r= 0.110481, it means that their performance is in the same way.
The following graph showing Sensex weekly returns versus EdServ Soft
systems Ltd weekly return for a period of 3 months from the date of its listing:
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r = 0.110481
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Inference:
From the above table it can be observed that the stock was closed at a premium on the
day of its listing. It was issued at a price of Rs 60 but is ended the day by Rs136.4 that is a
premium. But with in a week its price drastically reduced Rs 56%. It was opened good but fails
to perform.
The correlation between Sensex and EdServ is 0.110 it shows a very low positive
correlation between them. It means that their performance some times in the same way.
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Table showing weekly returns of Excel Infoways Ltdfor a period of 3
months from the date of listing along with the corresponding Sensex returns:
WEEKS EXCEL INFOWAYS LTD.
WEEKLY RETURN
SENSEX WEEKLY
RETURN
1 7.150 -4.798
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DateClosing
price
SENSEX DateClosing
price
SENSEX
8/3/2009 95.1 15924.23 9/22/2009 72.5 16886.43
8/4/2009 105.5 15830.98 9/23/2009 72.9 16719.5
8/5/2009 108.2 15903.83 9/24/2009 72 16781.43
8/6/2009 100.55 15514.03 9/25/2009 71.6 16693
8/7/2009 101.9 15160.24 9/29/2009 75 16852.91
8/10/2009 118.45 15009.77 9/30/2009 79.4 17126.84
8/11/2009 122 15074.59 10/1/2009 77.05 17134.55
8/12/2009 103.9 15020.16 10/5/2009 76.4 16866.41
8/13/2009 99.85 15518.49 10/6/2009 77 16958.54
8/14/2009 103.2 15411.63 10/7/2009 71.6 16806.66
8/17/2009 102.95 14784.92 10/8/2009 71.2 16843.54
8/24/2009 91.75 15628.75 10/9/2009 71.5 16642.66
8/25/2009 90.15 15688.47 10/12/2009 69.5 17026.67
8/26/2009 90 15769.85 10/14/2009 69.2 17231.11
8/27/2009 90.1 15781.07 10/15/2009 68.2 17195.2
8/28/2009 90.1 15922.34 10/16/2009 69.1 17322.82
8/31/2009 90.85 15666.64 10/20/2009 68.85 17223.01
9/1/2009 90 15551.19 10/21/2009 67.1 17009.17
9/2/2009 90.5 15467.46 10/22/2009 66.35 16789.74
9/3/2009 90.1 15398.33 10/23/2009 66 16810.81
9/4/2009 88 15689.12 10/26/2009 66.35 16740.59/7/2009 82.9 16016.32 10/27/2009 66.2 16353.4
9/8/2009 77 16123.67 10/28/2009 74.15 16283.49
9/9/2009 75.5 16183.55 10/29/2009 70.1 16052.72
9/10/2009 74.4 16216.86 10/30/2009 70 15896.28
9/11/2009 79.1 16264.3 11/3/2009 60.05 15404.94
9/14/2009 80.9 16214.19
9/15/2009 80 16454.45
9/16/2009 77.8 16677.04
9/17/2009 75.45 16711.11
9/18/2009 73.5 16741.3
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2 -12.875 2.677
3 -12.482 7.693
4 -3.137 0.143
5 -4.584 1.548
6 -9.147 3.251
7 -1.241 -1.145
8 2.733 1.6719 -6.414 -1.327
10 -0.576 1.739
11 -4.139 -2.393
12 5.501 -5.043
H0: There is no correlation between Excel Infoways Ltd weekly returns and Sensex weekly
returns.
H1: There is correlation between Excel Infoways Ltd weekly returns and Sensex weekly returns.
Conclusion: There is highly negative correlation, hence H1 accepted
Interpretation: The correlation between Excel Infoways Ltd weekly returns and Sensex
weekly returns is r=-0.76133, it means that their performance is highly opposite way.
The following graph showing Sensex weekly returns versus Excel
Infoways Ltdweekly return for a period of 3 months from the date of its listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 45
r = -0.76133
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Table showing weekly returns of Jindal Cotex Ltd for a period of 3 months
from the date of listing along with the corresponding Sensex returns:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 47
DateClosing
priceSENSEX Date
Closing
priceSENSEX
9/22/2009 86.5 16886.43 11/11/2009 84 16849.6
9/23/2009 87.5 16719.5 11/12/2009 84.2 16696.03
9/24/2009 86.15 16781.43 11/13/2009 88.5 16848.83
9/25/2009 82 16693 11/16/2009 90.15 17032.51
9/29/2009 85 16852.91 11/17/2009 91.5 17050.65
9/30/2009 85 17126.84 11/18/2009 90.9 16998.78
10/1/2009 82.8 17134.55 11/19/2009 87.8 16785.65
10/5/2009 83.45 16866.41 11/20/2009 90.2 17021.85
10/6/2009 84.4 16958.54 11/23/2009 89.4 17180.18
10/7/2009 86.3 16806.66 11/24/2009 90.55 17131.08
10/8/2009 86 16843.54 11/25/2009 89.8 17198.95
10/9/2009 85 16642.66 11/26/2009 86.45 16854.93
10/12/2009 87 17026.67 11/27/2009 87 16632.01
10/14/2009 88 17231.11 11/30/2009 104.85 16926.22
10/15/2009 88.25 17195.2 12/1/2009 107.7 17198.27
10/16/2009 88.15 17322.82 12/2/2009 107.5 17169.91
10/20/2009 86.9 17223.01 12/3/2009 105.5 17185.68
10/21/2009 85.8 17009.17 12/4/2009 105 17101.54
10/22/2009 85 16789.74 12/7/2009 103.4 16983.14
10/23/2009 89.9 16810.81 12/8/2009 110.25 17227.6810/26/2009 85.5 16740.5 12/9/2009 109.5 17125.22
10/27/2009 85.5 16353.4 12/10/2009 109.55 17189.31
10/28/2009 83.5 16283.49 12/11/2009 105.65 17119.03
10/29/2009 84.5 16052.72 12/14/2009 109.65 17097.55
10/30/2009 82 15896.28 12/15/2009 106.4 16877.16
11/3/2009 78.4 15404.94 12/16/2009 106.1 16912.77
11/4/2009 79.1 15912.13 12/17/2009 100.5 16894.25
11/5/2009 80.45 16063.9 12/18/2009 100.3 16719.83
11/6/2009 83.25 16158.28 12/21/2009 99.75 16601.2
11/9/2009 83.35 16498.72 12/22/2009 98 16692
11/10/2009 82.8 16440.56
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WEEKSJINDAL COTEX LTD
WEEKLY RETURN
SENSEX WEEKLY
RETURN
1 -5.202312139 -1.145475983
2 -2.588235294 1.671165395
3 1.857399641 -1.326601215
4 1.32183908 1.739330122
5 3.452243959 -2.393309886 -4.093567251 -5.0429796
7 6.18622449 4.890249491
8 6.178764247 2.122043407
9 0.055463117 -0.062586195
10 -2.684563758 -3.190711622
11 0.143061516 1.035789444
12 2.176015474 0.80014649813 -8.527131783 -2.209205412
H0: There is no correlation between Jindal Cotex Ltd weekly returns and Sensex weekly
returns.H1: There is correlation between Jindal CotexLtdweekly returns and Sensex weekly returns.
Conclusion: There is high degree positive correlation, hence H1 accepted
Interpretation: The correlation between Jindal CotexLtd weekly returns and Sensex weeklyreturns is r= 0.61952, it means that their performance is in the same way.
The following graph showing Sensex weekly returns versus Jindal Cotex
Ltdweekly return for a period of 3 months from the date of its listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 48
r = 0.61952
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Inference:
From the above table it can be observed that the stock was closed at a premium on the
day of its listing. It was issued at a price of Rs 75 but is ended the day by Rs86.5 that is a
premium of 15.33%
The correlation between Jindal CotexLtdweekly returns and Sensex weekly returns is r=
0.61952, it means that their performance is in the same way
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Table showing weekly returns of Mahindra Holidays & Resorts India Ltd
for a period of 3 months from the date of listing along with the corresponding
Sensex returns:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 50
DateClosing
price
SENSEX DateClosing
price
SENSEX
7/16/2009 317.1 14250.25 8/28/2009 337.7 15922.34
7/17/2009 349.45 14744.92 8/31/2009 344.6 15666.64
7/20/2009 356.75 15191.01 9/1/2009 335.6 15551.19
7/21/2009 352.65 15062.49 9/2/2009 333.95 15467.46
7/22/2009 348.7 14843.12 9/3/2009 332.4 15398.33
7/23/2009 363.5 15231.04 9/4/2009 332.65 15689.12
7/24/2009 375.65 15378.96 9/7/2009 340.4 16016.32
7/27/2009 385.85 15375.04 9/8/2009 339 16123.67
7/28/2009 382.65 15331.94 9/9/2009 333.75 16183.55
7/29/2009 366.85 15173.46 9/10/2009 329.4 16216.86
7/30/2009 359.95 15387.96 9/11/2009 327 16264.3
7/31/2009 356.3 15670.31 9/14/2009 326.8 16214.19
8/3/2009 345.45 15924.23 9/15/2009 339 16454.45
8/4/2009 342.95 15830.98 9/16/2009 338.35 16677.04
8/5/2009 348.8 15903.83 9/17/2009 332.3 16711.11
8/6/2009 348.6 15514.03 9/18/2009 329.75 16741.3
8/7/2009 342.45 15160.24 9/24/2009 323.45 16781.43
8/10/2009 336.8 15009.77 9/25/2009 336.35 16693
8/11/2009 340.35 15074.59 9/29/2009 344.55 16852.91
8/12/2009 332.85 15020.16 9/30/2009 347.6 17126.84
8/13/2009 346 15518.49 10/1/2009 342.6 17134.558/14/2009 337.85 15411.63 10/5/2009 334.25 16866.41
8/17/2009 326.05 14784.92 10/6/2009 333.6 16958.54
8/18/2009 329.95 15035.26 10/7/2009 330.75 16806.66
8/19/2009 322.9 14809.64 10/8/2009 340.5 16843.54
8/20/2009 327.95 15012.32 10/9/2009 337.05 16642.66
8/21/2009 322.9 15240.83 10/12/2009 346.05 17026.67
8/24/2009 349.65 15628.75 10/14/2009 343.4 17231.11
8/25/2009 338.3 15688.47 10/15/2009 355.25 17195.2
8/26/2009 338.15 15769.85 10/16/2009 350.05 17322.82
8/27/2009 341.7 15781.07
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WEEKS
MAHINDRA HOLIDAYS &
RESORTS INDIA LTD.
WEEKLY RETURNS
SENSEX WEEKLY
RETURNS
1 10.20182908 3.471307521
2 5.29782761 1.237244923
3 -7.658416483 1.920450288
4 -0.868432479 -4.797657406
5 0.31175772 2.677322837
6 -0.966109492 3.083614927
7 -3.417703418 1.878525154
8 -3.467788741 0.143489606
9 -3.936545241 1.548295738
10 0.902692778 3.250917869
11 5.920544134 2.104230688
12 0.837696335 -1.326601215
13 1.155902326 1.739330122H0: There is no correlation between Mahindra Holidays & Resorts India Ltd weekly returns and
Sensex weekly returns.
H1: There is correlation between Mahindra Holidays & Resorts India Ltd weekly returns and
Sensex weekly returns.
Conclusion: There is low degree positive correlation, hence H1 accepted
Interpretation: The correlation between Mahindra Holidays & Resorts India Ltd weekly
returns and Sensex weekly returns is r= 0.2112 it means that their performance is in the
same way.
The following graph showing Sensex weekly returns versus Mahindra
Holidays & Resorts India Ltdweekly return for a period of 3 months from the
date of its listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 51
r = 0.2112
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Inference:
From the above table it can be observed that the stock was closed at a premium on the
day of its listing. It was issued at a price of Rs 300 but is ended the day by Rs317.1 that is a
premium of 5.7%
The correlation between Mahindra Holidays & Resorts India Ltd weekly returns and
Sensex weekly returns is r= 0.2112 it means that their performance is in the same way.
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Table showing weekly returns of NHPC Ltd for a period of 3 months from
the date of listing along with the corresponding Sensex returns:
WEEKSNHPC LTD WEEKLY
RETURN
SENSEX WEEKLY
RETURNS
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 53
Date Closing price SENSEX Date Closing price SENSEX
9/1/2009 36.8 15551.19 10/20/2009 32.95 17223.01
9/2/2009 36.35 15467.46 10/21/2009 32.65 17009.17
9/3/2009 36.1 15398.33 10/22/2009 32.7 16789.74
9/4/2009 35.3 15689.12 10/23/2009 32.5 16810.81
9/7/2009 34.55 16016.32 10/26/2009 32.05 16740.5
9/8/2009 35.3 16123.67 10/27/2009 31.8 16353.4
9/9/2009 34.6 16183.55 10/28/2009 31.2 16283.49
9/10/2009 33.95 16216.86 10/29/2009 30.65 16052.729/11/2009 33.35 16264.3 10/30/2009 30.5 15896.28
9/14/2009 33.95 16214.19 11/3/2009 30.15 15404.94
9/15/2009 34 16454.45 11/4/2009 30.1 15912.13
9/16/2009 36.2 16677.04 11/5/2009 30.8 16063.9
9/17/2009 35.55 16711.11 11/6/2009 33.1 16158.28
9/18/2009 35.4 16741.3 11/9/2009 32.75 16498.72
9/22/2009 35 16886.43 11/10/2009 32.65 16440.56
9/23/2009 34.75 16719.5 11/11/2009 32.45 16849.6
9/24/2009 34.7 16781.43 11/12/2009 32.3 16696.03
9/25/2009 34.85 16693 11/13/2009 32.25 16848.839/29/2009 34.55 16852.91 11/16/2009 32.3 17032.51
9/30/2009 34.5 17126.84 11/17/2009 32.45 17050.65
10/1/2009 34.3 17134.55 11/18/2009 32.05 16998.78
10/5/2009 34.1 16866.41 11/19/2009 31.8 16785.65
10/6/2009 33.35 16958.54 11/20/2009 31.8 17021.85
10/7/2009 33.4 16806.66 11/23/2009 31.7 17180.18
10/8/2009 33.3 16843.54 11/24/2009 31.55 17131.08
10/9/2009 33.05 16642.66 11/25/2009 31.05 17198.95
10/12/2009 32.9 17026.67 11/26/2009 30.9 16854.93
10/14/2009 32.85 17231.11 11/27/2009 31.75 16632.01
10/15/2009 33.55 17195.2 11/30/2009 31.2 16926.22
10/16/2009 33.45 17322.82
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1 -0.04491018 0.886941771
2 -3.473227207 1.548295738
3 4.270986745 3.250917869
4 -0.428571429 -1.145475983
5 -0.723589001 1.671165395
6 -3.079178886 -1.326601215
7 1.671732523 1.739330122
8 -1.365705615 -2.39330988
9 -4.836193448 -5.0429796
10 9.784411277 4.890249491
11 -1.526717557 2.122043407
12 -1.547987616 -0.062586195
13 0.157728707 -3.190711622
H0: There is no correlation between NHPC Ltdweekly returns and Sensex weekly returns.
H1: There is correlation between NHPC Ltdweekly returns and Sensex weekly returns.
Conclusion: There is a high degree positive correlation, hence H1 accepted
Interpretation: The correlation between NHPC Ltd weekly returns and Sensex weekly
returns is r= 0.6977 it means that their performance is in the same way.
The following graph showing Sensex weekly returns versus NHPC Ltd
weekly return for a period of 3 months from the date of its listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 54
r = 0.6977
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Inference:
From the above table it can be observed that the stock was closed at a premium on the
day of its listing. It was issued at a price of Rs 36 but is ended the day by Rs36.8 that is a
premium of 2.2%
The correlation between NHPC Ltd weekly returns and Sensex weekly returns is r=
0.6977 it means that their performance is in the same way.
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Table showing weekly returns of Raj Oil Mills Ltd for a period of 3
months from the date of listing along with the corresponding Sensex returns:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 56
DateClosing
priceSENSEX Date
Closing
priceSENSEX
8/12/2009 119.30 15020.16 9/29/2009 81.10 16852.91
8/13/2009 116.90 15518.49 9/30/2009 80.70 17126.84
8/14/2009 107.40 15411.63 10/1/2009 79.50 17134.55
8/17/2009 90.10 14784.92 10/5/2009 78.55 16866.41
8/18/2009 91.35 15035.26 10/6/2009 77.15 16958.54
8/19/2009 93.65 14809.64 10/7/2009 75.90 16806.66
8/20/2009 92.00 15012.32 10/8/2009 74.50 16843.54
8/21/2009 89.80 15240.83 10/9/2009 75.45 16642.66
8/24/2009 86.20 15628.75 10/12/2009 74.25 17026.678/25/2009 87.60 15688.47 10/14/2009 75.40 17231.11
8/26/2009 93.95 15769.85 10/15/2009 74.20 17195.2
8/27/2009 90.60 15781.07 10/16/2009 73.80 17322.82
8/28/2009 89.15 15922.34 10/20/2009 74.00 17223.01
8/31/2009 88.80 15666.64 10/21/2009 73.35 17009.17
9/1/2009 86.80 15551.19 10/22/2009 71.20 16789.74
9/2/2009 85.75 15467.46 10/23/2009 71.70 16810.81
9/3/2009 85.05 15398.33 10/26/2009 70.15 16740.5
9/4/2009 83.10 15689.12 10/27/2009 65.50 16353.4
9/7/2009 85.15 16016.32 10/28/2009 63.60 16283.499/8/2009 84.65 16123.67 10/29/2009 66.00 16052.72
9/9/2009 83.10 16183.55 10/30/2009 62.35 15896.28
9/10/2009 82.90 16216.86 11/3/2009 59.50 15404.94
9/11/2009 80.95 16264.3 11/4/2009 57.80 15912.13
9/14/2009 79.90 16214.19 11/5/2009 60.60 16063.9
9/15/2009 84.80 16454.45 11/6/2009 62.10 16158.28
9/16/2009 83.40 16677.04 11/9/2009 62.15 16498.72
9/17/2009 82.45 16711.11 11/10/2009 60.50 16440.56
9/18/2009 83.25 16741.3 11/11/2009 62.85 16849.6
9/22/2009 81.75 16886.43 11/12/2009 62.35 16696.03
9/23/2009 80.80 16719.59/24/2009 80.60 16781.43
9/25/2009 81.60 16693
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Inference:
From the above table it can be observed that the stock was closed at a discount on the day
of its listing. It was issued at a price of Rs 120 but is ended the day by Rs119.30 that is a
discount of 2.2% it was perform good in first week then suddenly in second week its price
drastically reduce to Rs90 and went down .Huge variation in this stock price.
The correlation between Raj Oil Mills Ltd weekly returns and Sensex weekly returns is
r= 0.5976, it means that their performance is in the same way
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WEEKS
RISHABHDEV
TECHNOCABLE LTD.
WEEKLY RETURNS
SENSEX WEEKLY
RETURN
1 -3.513513514 -5.121729672
2 7.26744186 -4.567776891
3 -3.08988764 5.046055506
4 2.064896755 -1.98725435
5 0.884955752 5.099384154
6 -5.263157895 2.837664011
7 4.968944099 0.4207979
8 -5.236907731 1.038818667
9 -7.795698925 0.40174449
10 -0.864553314 -0.047007999
11 -2.325581395 -1.16619447
12 7.123287671 -5.0429796
H0: There is no correlation between Rishabhdev Technocable Ltd weekly returns and Sensex
weekly returns.
H1: There is correlation between Rishabhdev Technocable Ltd weekly returns and Sensex
weekly returns.
Conclusion: There is negative correlation, hence H1 accepted
Interpretation: The correlation between Rishabhdev Technocable Ltd weekly returns and
Sensex weekly returns is r= -0.4443 it means that their performance is in the opposite
way
The following graph showing Sensex weekly returns versus Rishabhdev
Technocable Ltd weekly return for a period of 3 months from the date of its
listing:
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 60
r = -0.4443
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Inference:
From the above table it can be observed that the stock was closed at a discount on the day
of its listing. It was issued at a price of Rs 33 but is ended the day by Rs18.5 that is a discount of
43.93%
The correlation between Rishabhdev Technocable Ltd weekly returns and Sensex weekly
returns is r= -0.4443 it means that their performance is in the opposite way
The following Table showing the returns of stock at the end of 3 months period
from the date of its listing:
Company Name Return at the end of 3 Comparable SENSEX
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months For Post IPO (%)returns (%)
ADANI POWER LIMITED-6.80934 9.612604975
EDSERV SOFTSYSTEMS LTD-81.195 72.82179322
EXCEL INFOWAYS LTD -36.8559 -3.26101
JINDAL COTEX LTD13.2948 -1.1514
MAHINDRA HOLIDAYS &
RESORTS INDIA LTD
10.39104 21.561516
NHPC LTD-15.2174 8.84196
RAJ OIL MILLS LTD -47.7311.15747
RISHABHDEV TECHNOCABLELTD.
-1.08 2.067465
From the above table it can be observed that, out of the 8 stocks selected for analysis,
only 2 stocks have showed positive returns at the end of a 3 month period and the remaining 6
stocks have traded below their issue price.
The investors had invested in the IPOs expecting to get a return of between 5 - 10
percent. But, according to the study 75% of the stocks listed below its issue price and 25% of the
stocks generated more than expected returns
PART 2
THE SURVEY: Investors perception on IPOs
1. The following information corresponds to the Age Group of Investors:
Table 1: showing Age group of investors:
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Chart 1: Showing the Age group of investors
Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 63
Sl. No. Age Group No of Respondents Percentage
1 < 20 4 4
2 20-40 48 48
3 40-60 42 42
4 > 60 6 6
100
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Source: Table No 1
Analysis & Interpretation:
From the above information It can be said that 48% of the investors willing to invest on
IPOs come in the age group of 20-40 years followed by the age group between 40 60years
consisting of 42%, 6% of the investors are aged above 60 years and a minority of 4% fallwithin
the age of 20 years.
It can be concluded that majority of the investors interested in investing on IPOs fall inthe age
group of 20 40
2. The following information corresponds to the gender of the investors
Table 2: Showing the Gender of investors
Sl. No. Gender No of Respondents Percentage
1 Male 84 84
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