Analyzing the Fundamental and Behavioral Aspects of IPO Valuations by Comparing Merchant Bankers’ and Market Valuations

Initial Public Offer IPO is one of the most preferred strategies for companies to go public and now a days we can see a lot of people just applying for the listing gains sometimes without even knowing the name of the company. So, the purpose of this study was to critically analyze whether the valuations given by merchant bankers or the price band set by them is justified or there is a significant difference between price set by them and that perceived by market forces. Descriptive research with secondary data and primary was carried out, correlational, multiple regression and hypothesis testing was used on data for the last 3 year IPO's in the Indian stock market. IPO price band is compared with the listing price and price after few months to judge the fairness of valuations given by merchant bankers and analyze whether there was an overreaction, under reaction or an optimal reaction on the price given by the merchant bankers. Further analysis has been done to know whether there is a difference in the way the market reacts to companies doing traditional business and technology or new age companies. Lavan Jain | Richa Phirke | Jigar Bhajiawala | Khushi Aslam | Shloka Tibrewala "Analyzing the Fundamental and Behavioral Aspects of IPO Valuations by Comparing Merchant Bankers' and Market Valuations" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-5 , August 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50578.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50578/analyzing-the-fundamental-and-behavioral-aspects-of-ipo-valuations-by-comparing-merchant-bankers'-and-market-valuations/lavan-jain