SME IPOs in Indian Capital Market

The present study attempts to examine the performance of IPOs which were issued though and listed on BSE SME and NSE EMERGE platforms. The study finds that with the passage of time, this platform is gaining momentum as number of issues listed on such platforms is increasing over the years and average issue size of the individual IPO stands around 8 crore which is encouraging. Further, it is validated that, on an average SME IPOs are underpriced to the extent of 10.60%. This outcome is consistent with universally accepted phenomena of initial underpricing. Authors find that though there is decreasing trend in the magnitude of underpricing during the period under study but the result of ANOVA depicts that the difference is not statistically significant. Finally, with the results of correlation analysis it is realised that there is significant relationship between magnitude of underpricing and subscription rate i.e. these two variables have a tendency to move in the same direction. This study has implication for investors, small business houses, investment bankers and regulatory bodies.