SHORT-RUN PERFORMANCE OF SME IPOs IN INDIAN CAPITAL MARKET

Abstract

This paper is based on the belief that Indian SMEs have limitations regarding the financing of capital.As
the cost of financing plays a significant role in the growth of SME, it is important to raise money efficiently.
Large companies can raise equity using BSE platform whereas for SMEs it becomes difficult to raise money
through equity. Considering this limitation, the Bombay Stock Exchange (BSE) and National Stock
Exchange (NSE) has facilitated a platform for SMEs to raise money in a cost-efficient way. This study is
based on how Indian SMEs are utilizing this platform to raise capital. The study has observed atrend of
SME IPOs issued in the Indian capital market during the period 2014-2018. The study measures the shortrun price performance of IPOs using market-adjusted excess return as criteria. The paper also studies the
impact of issue size and issue price on the short-run performance of the IPO.