Listing Performance of IPOs: A Comparative Study of Mainboard and SME Board Listings on BSE (Zenodo (CERN European Organization for Nuclear Research))

Summary

• The study analyzes 90 IPOs listed on the Bombay Stock Exchange (BSE) during 2022, consisting of 52 SME IPOs and 38 Mainboard IPOs.p.1
• SME IPOs generated a mean listing gain of 21.54 per cent compared to 9.74 per cent for Mainboard IPOs, reflecting an 11.80 per cent difference.p.7
• SME IPOs exhibited high volatility with a standard deviation of 36.63 per cent (ranging from -50 per cent to 108.93 per cent), compared to 16.14 per cent for Mainboard IPOs.p.6
• The number of SME IPOs on BSE grew from 27 in 2021 to 52 in 2022.p.4

Key insights

1. SME IPOs delivered higher average listing returns of 21.54 per cent compared to 9.74 per cent for Mainboard IPOs on the BSE in 2022.p.1
2. The difference in mean listing gains between SME and Mainboard IPOs was statistically significant with a t-value of 2.02 and a p-value of 0.046.p.8
3. Median listing returns were modest across both segments, recording 3.58 per cent for SME IPOs and 3.72 per cent for Mainboard IPOs.p.7
4. SME IPOs exhibited substantial return dispersion, featuring a maximum listing gain of 108.93 per cent and a minimum return of -50 per cent.p.6
5. Mainboard IPOs demonstrated greater price stability, with a standard deviation of 16.14 per cent and returns bounded between -8.62 per cent and 54.91 per cent.p.6
6. A higher proportion of SME IPOs were underpriced (71.15 per cent) than Mainboard IPOs (63.16 per cent).p.5