INTRODUCTION
An initial public offering (IPO), referred to simply as an "offering" or "flotation", is when a
company (called the issuer) issues common stock or shares to the public for the first time.
They are often issued by smaller, younger companies seeking capital to expand, but can also
be done by large privately-owned companies looking to become publicly traded.
In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), best offering price and time
to bring it to market.
An IPO can be a risky investment. For the individual investor it is tough to predict what the
stock or shares will do on its initial day of trading and in the near future since there is often
little historical data with which to analyze the company. Also, most IPOs are of companies
going through a transitory growth period, and they are therefore subject to additional
uncertainty regarding their future value.
Capital market is an essential pre-requested for industrial and commercial development of a
country. Capital market refers to the institutional arrangement which facilitates the
borrowings and lending of long term fund. In capital market we can divided into two parts
they are primary and secondary market. In primary market also known as new issue market.
It represents primary market where new securities i.e. shares or bonds that have never been
previously offered.The importance of this study is analyzing the IPO scrip’s during the year
2013 to 2017. This study based on differences of Issue price and LTP. In order to whether the
IPO’s are overpriced or under priced. The investor how get the gain or loss.The study
continued based on the only 2 parameters they are Issue price and LTP. The differences of
LTP & Issue price we can describe the scrip is overpriced or under priced. Not other
parameters considered. This study shows that sector wise scrip’s are overpriced or under
priced.
In this study find the IPO how gives the benefits and given the
guidelines and suggestions to the investor. Before selecting a company the investor should
think about the company. A good investor should diversify and reduces his risk by investing
in different securities. Primary market returns are very attractive in short period especially on
the day of listing. But investor in IPO’s should take wise decision in choosing the best
company.
SCOPE OF THE STUDY:
1) The study covers only NSE listed securities of primary market.
2) Only LTP and Issue price are taken into consideration for judging whether the scrip’s
are under priced or over priced not considering other parameters.
3) The study covers the period from year2015-2019 only
4) Study covers randomly selected scrip’s under various sectors.
OBJECTIVES THE STUDY:
1. The objective of doing this project is mainly to make a study of trends in primary market
from 2015-2019 with special reference to LTP (Last Traded Price) and Issue Price.
2. To examine the difference between LTP and Issue Price of various scraps in different
sectors.
3. To assess whether the Issue Price are over priced or under priced based on difference
between LTP and Issue Price.
4. To examine gain or loss to the investor based on the above study.
METHODOLOGY OF THE STUDY:
The data collection methods include both primary and secondary collection methods.
Primary Data: This method includes the data collected from the personal
interaction with authorized members of ICICI BANK LIMITED.
Secondary Data: The secondary data collection method includes:
The lecturers delivered by the superintendents of respective departments.
The brochures and material provided by ICICI BANK LIMITED.
The data collected from the magazines of the NSE, economic times, NSE website, etc.
Various books relating to the investments, capital market and other related topics.
TOOLS USED FOR ANALYSIS:
1) TABULATION: A Table is a systematic arrangement of statistical data in rows and
columns. Rows are horizontal arrangements whereas columns are vertical. Tabulation is a
systematic presentation of data in a form suitable for analysis and interpretation.
The tables used are as follows:
a) One way table: It presents only one characteristic and hence in answering one or more
independent questions with regard to those characteristics.
b) Two-way table: It contains sub divisions of a total and is able to answer two mutually
dependent questions.
2) DIAGRAMETIC AND GRAPHICAL REPRESENTATION OF DATA: A picture is
worth a thousand words. The impression created by a picture has much greater impact
than any amount of detailed explanation. Statistical data can be effectively presented in
the form of diagrams and graphs. Graphs and Diagrams make complex data simple and
easily understandable. They help to compare related data and bring out subtle data with
amazing clarity.
The Diagram used are as follows:
a) Bar diagrams: Bar diagrams are used specifically for categorical data or series. They
consist of the group of equi-distant rectangles, one for each group or category of data
in which the values of magnitudes are represented by length or height of rectangles.
b) Sample Bar diagram: It is used of comparative study of two or more aspects of a
single variable or single category of data.
LIMITATIONS OF THE STUDY:
A good report sells the results of the study. But every project has its own limitations.
These limitations can be in terms of
1) The project doesn’t study the whole primary market due to time availability and
course requirement.
2) Project doesn’t consider whole issues under each sector due to time limitation. It
takes Into consideration randomly selected issues
3) Limited to a particular period: Data under consideration is taken from 2015-2019
Previous years are not taken into consideration.
4) Partial fulfillment: Project studied doesn’t fulfill all requirements because it does not
study the whole primary market due to time availability and course Requirement. It only
fulfills the partial requirement as it studies only certain Important aspects of primary
market.
5) Approximate results: The results are approximated, as no accurate data is Available.
6) Study takes into consideration only LTP and issue prices and their difference for
Concluding whether an issue is overpriced or under priced leaving other.
7) The study is based on the issues that are listed on NSE only.
