An Empirical Study On Optimal Investment Horizon While Investing Through IPO W.R.T. Indian Stock Market

Abstract

Many of Indian retail investor’s stock market investment journey start with IPO, initially they participate only in IPO and then slowly they may get involve themselves in secondary market either as an long-term investor or as an short term investor. Now a day’s majority of IPO are getting listed with premium and few are also getting listed with discount. Generally when IPO listed with premium retail investor book the profit but when it is listed with discount at that point of time investors are in dilemma regarding whether they should hold the investment on exit by booking loss. In this research paper researchers have tried to analyze the optimal time horizon which investor should keep in mind to make their IPO investment profitable if it listed with discount. For attaining the objectives of the research all 109 listed IPO’s between year 2015 to 2019 have been taken as sample and analyzed their monthly return with respect to issue price for attaining the main objective of getting minimum investment horizon which give profit to investors. After analysis it is found that return produce by IPO at the time if listing is highest in majority of the sample and same return will be available at least after 5 months of listing.