Investors Perception on IPOs and Post Performance of IPOs During 2009

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.

Dayananda Sagar College of Arts, Science and Commerce, Bangalore-078 Page 1


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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 underpricing 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


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

http://www.adanipower.com/Corporate/Corporate.html#gautamadanihttp://www.adanipower.com/Corporate/Corporate.html#rajeshadanihttp://www.adanipower.com/Corporate/Corporate.html#ameethttp://www.adanipower.com/Corporate/Corporate.html#rajeshadanihttp://www.adanipower.com/Corporate/Corporate.html#ameethttp://www.adanipower.com/Corporate/Corporate.html#gautamadani


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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:

http://www.adanipower.com/Corporate/Corporate.html#rkmadanhttp://www.adanipower.com/Corporate/Corporate.html#vijayhttp://www.adanipower.com/Corporate/Corporate.html#tutejahttp://www.adanipower.com/Corporate/Corporate.html#tondonhttp://www.adanipower.com/Corporate/Corporate.html#rajeevasinhahttp://www.adanipower.com/Corporate/Corporate.html#rkmadanhttp://www.adanipower.com/Corporate/Corporate.html#vijayhttp://www.adanipower.com/Corporate/Corporate.html#tutejahttp://www.adanipower.com/Corporate/Corporate.html#tondonhttp://www.adanipower.com/Corporate/Corporate.html#rajeevasinha


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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.




Price band (Rs) 55.00 - 60.00

Issue price (Rs) 60

Capital issue date 05-2-2009

Listing date 02-03-2009




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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.






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.




Price band (Rs) Rs. 70.00 - 75.00

Issue price (Rs) 75

Capital issue date 27 Aug 2009

Listing date 22 Sep 2009




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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.




Price band (Rs) Rs. 275.00 - 325.00

Issue price (Rs) 300

Capital issue date 23 Jun 2009

Listing date 16 Jul 2009




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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.




Price band (Rs) Rs. 30.00 - 36.00

Issue price (Rs) 36

Capital issue date 07 Aug 2009

Listing date 01 Sep 2009


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.




Price band (Rs) Rs. 29.00 - 33.00

Issue price (Rs) 33

Capital issue date 04 Jun 2009

Listing date 29 Jun 2009




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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.


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:


r = 0.110481


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Inference:



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


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:


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:


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:


r = 0.61952


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Inference:



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:


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:


r = 0.2112


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Inference:



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.



53/107


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


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:


r = 0.6977


55/107


Inference:



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.



56/107


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:


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


57/107


58/107


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:


r = -0.4443


61/107


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:



63/107


Chart 1: Showing the Age group of investors


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


8/3/2019 Investors Perception on

Investors Perception on IPOs and Post Performance of IPOs During 2009

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