Regulatory Reforms and IPO Performance in India: Evidence from Pre- and Post- SEBI Reforms

Initial Public Offerings (IPOs) form one of the most significant tools with the help of which companies enter capital markets and increase the area of their activity. Investor expectations of IPOs have changed significantly over the last ten years to include more than high listing-day returns to expectations that require value creation that is long-lasting, greater transparency, and strict regulatory adherence. Since India is among the fastest-growing economies in the world, the IPO environment in the Indian market has grown tremendously in addition to the major regulatory changes that are being undertaken to improve market integrity. This paper examines the Indian IPO performance over two-time horizons, i.e., 2010–2014, before some major SEBI reforms and 2019–2024, after major regulatory interventions. The key question to be determined is whether the new policy changes at SEBI have helped to achieve fairer pricing, reduced volatility and increased returns to long term investors. The study uses both descriptive and comparative research methods to examine the empirical IPO data to assess the trends of listing gains, post-listing returns, investor participation, and price stability. The sample will include the IPOs of different industries such as finance, technology, and consumer goods which are found in the NSE and BSE listing. Listing price, issue price, six-month returns, and one-year returns, and subscription intensities were used as variables. Results indicate that there is discernible change in the misunderstood direction of less under-pricing and more sustainable post-IPO performance in the post reform era, which highlights the positive nature of the regulatory oversight in developing more stable and fair capital market in India.