ICIDR International Journal Of Interdisciplinary Research Vol. 1 No. 2 (2021): Impact of Covid-19 on Society - International Center ...
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ICIDR International Journal Of Interdisciplinary Research
Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
Investors Sentiments Towards Initial Public Offer In The Pandemic
Environment
Shriya. K1& Dr.T. Velmurugan2
1
sk4013@srmist.edu.in,College of Management, SRM Institute of Science and Technology,
Kattankulathur, Chengalpattu District, Tamilnadu – 603203
2
velmurut@srmist.edu.in, College of Management, SRM Institute of Science and
Technology, Kattankulathur, Chengalpattu District, Tamilnadu – 603203
Abstract: Equity markets generally tend to react more adversely to negative news whereas
there is a cautious optimism to positive news. The outbreak of covid-19 and the consequence
market meltdown was witnessed across the world and Indian markets where no expectation.
However, a slew of initial public offer(IPO)hit the market from 1st June 2020 till 23rd July
2020 and most of these issues where not only over subscribed but also managed to lift at a
healthy premium to reissue price the fierce about the price and the sinking economy were set
aside and the markets continue to hale a new high after recovering from the early setbacks in
April and May.
This descriptive study examines the factors that influenced the initial public offer(IPO) or
buy them in the secondary market after listing. The study uses the questionnaire for the study
purpose and appropriate statistical tools for the purposes of analysis and interpretation of
data. The study is expected to reveal that millennial investorin the age group of 20-30 are
largely responsible for the people in the market triggered by new issues and attractive
premium on offers.
Keywords:investors sentiments, public moods, equity market, retailpublicoffer, listing
premium
Introduction
Iinvestors sentiment refers to the overall attitude of investors toward a particular security
(stock or mutual funds) or financial market. It is the feeling or psychology, as revealed
through the activity and price movement of the securities traded in that market. Stock markets
across the world are driven by strong fundamentals in the long-term and liquidity in the
medium term. However, in the medium term. Driven by mood and sentiments triggered by
ICIDR International Journal Of Interdisciplinary Research [Type text] Page 1ICIDR International Journal Of Interdisciplinary Research
Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
news both positives and negatives. In fact, investor reaction to good news is muted why it is
quite strong for negative news.
Investors usually describe market sentiment as bearish or bullish as they tend to make an idea
for buying or selling. When bears are in control, stock prices are going down. When bulls are
in control, stock prices are going up. Emotion often drives the stock market, so market
sentiment is not always synonymous with fundamental value. That is, market sentiment is
about feelings and emotion, whereas fundamental value is about business performance. The
securities which the company’s issue for the first time to the public either after incorporation
or on conversion from private to public company is called “INITIAL PUBLIC OFFERING
“The control towards the sentiments makes the market being driven to a better
portfolio. stocks are a well-known investment option, Under the right options and study,
real estate can be an alternative to stocks, offering lower risk, yielding better returns, and
providing greater diversification.
Justification for the study: The initial public offer is being the important part of the stock
in the market today which helps to bring in funds apart from the money the company has. H
the study finds that the investors' investment in an IPO reduces under-pricing. Additionally,
the larger the number of anchors bidding for an issue the less would be the under-pricing.
market to reduce information wrong information among issuing firm, investment bankers and
investors. This study makes us understands the IPO’s importance. Hence this study attempts
to analyse the investors sentiments towards initial public offer in the pandemic environment
from April 2020 to July 2021.
Scope Of the Study
To know how an ipo works and being stable in the market. The study will make a clear idea
in the mindset of investors and the company where to set the exact set of financials they
require.
ObjectivesOf the Study
The study involves the following objectives: -
Initial public offer is a process through where the subscription being subscribed in a
issue price or oversubscribed or undersubscribed.
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
The sector wise ipo has initiated where the investors can identify the portfolio they
want in order for long-term profit as they have a set target.
The data being there acts great financial wall in order the ipo will help the company or
an individual to plan for the future.
Review of Literature:
1. Do anchor investors create value for initial public offerings? An
empirical investigation:
This study has an empirical investigation where the market has a condition where the
retail investors being investing in the beginning of the issue in which it creates value for the
share this study has been done in order with 135 initial public offers issued through book
building concept in the Indian market the study revealed that make them understand better
about the market.
2. Earnings Management and Performance of IPO Firms: Evidence from
India:
This study proves that the how the earnings being where the potential investors have a
long term which as a better portfolio and has a better target towards the future.The study
proved that earning through ipo has a higher impact and a better future.
3. ARE IPOs under-priced or overpriced? Evidence from an emerging
market
The study has been proven through a short-term trail where it has been proven
through a getter result. The study found that IPOs on average were under-priced by 47% and
that 32 IPOs were overpriced by approximately 17%–18% out of 128 ipos listed in from 1997
to 2017.
4. 90% Of Indian Start-ups Will Fail Because Of Lack of Innovation,
Study Says
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
Which has been an initial part where the they are being stuck in the part of the proper
listing and the better performance of the requirements.
DATA ANALYSIS AND INTERPRETATION:
IPOS IN A WEAKER ECONOMIC CONDITIONS:
Typically, companies, plan that initial public offer during burton market conditions.
This is because the post issues listing price would be at a premium and boost investor
confidence paving the way for more active retail participation. On the other hand, issue that
hit the market during the adverse macro-economic conditions and weak global cues
invariably tend to fail, as have been the case immediately after the subsequent crisis in 2008
prior to this unprecedented global financial meltdown, two major issues in 2007 namely icici
bank and dlf both witnessed a runaway success and had a strong listing post issue. Another
mega issue for 2.5 billion by reliance power hit the market in mid-January 2008 a 72 times
oversubscribed share. However, the date of listing coincided with negative global cues, rising
crude oil prices, rise in inflation in India and serve liquidity crunch. After as a result there
was only a lukewarm response from investors when shares of are power when listed in nse
and bse. This was followed by 3million rise issue by state bank of India at 25% of the market
discount price (which was trading at 2490) as a result more liquidity got stocked out and
caused a failure of two ipos in February 2008, mrmes. since then, there were no issues worth
mentioning for almost one year till march 2009. This was an indication that it is most
important for a successful issue. Similar conditions prevailed in 2018 and 2019 after Punjab
national bank fraud cases over 11,000 crores and dull episode in September in 2019 even
good issues like that of Bombay stock exchange, icici securities, and icici prudential where
trading below the allotment price for almost 1year.
Hence there was a feeling of speciesism in the market after covid 19 outbreak and
global lock down from march 2020. The negative sentiments severely impacted the equity
market bringing them down to 60% of the previous hike by the 3rd week of march 2020. so
there where an apprehension of work, investor’s reaction during these critical conditions falls
in GDP, weak economic future and rise in crude oil prices all combined to paint a gloomy
picture. In a glaring contrast, however all the ipos that hit the market from July 2020 to
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
31.07.2021 have all been able to manage a decent to a strong subscription and listing shown
below:
Name of the Company Price band Subscription Subscribed
received
Tattva chitna 1073-1083 3261882 Issue price
India pesticide 290-296 19310345 Issue price
herbana 626-627 6981417 Issue price
Chemcon specialties 338-340 559173 Issue price
Rossari biotech 423-425 8173530 Over subscribed
Zomato 72-76 719233522 Over subscribed
Dodla dairy 421-428 8507569 Issue
Barbeque nation 498-500 499609 Issue
Bector food 286-288 13236211 Issue
Burger king 59-60 74491529 Over subscribed
Easy trip 187 15080644 Issue
Mtar tech 574-575 7260699 Issue
RailTel 94 61195923 Issue
Happiest minds 166 23559550 Oversubscribed
nazara 1100-1101 2920997 Issue
Kalyan jewellery 165-66 95709309 Over subscribed
Angel broking 305-306 13770941 Issue
Home first 518-519 12302672 Issue
irfc 25-26 1247505933 Over subscribed
Equitas bank 32-33 115850001 Issue
Uti amc 552-554 27350957 Issue
Stove kraft 384-385 5894643 Issue
Gr infra 828-837 8123594 Issue
Sector Wise Overview Of IPOS
Pharmaceutical
Expectations above an economy recovery the demand for antibiotics and immunity
boosting medicines as well as a possible break through research for vaccine to immunize
people all contributed to very successful issue in the pharmaceutical industry this is shown
below
Name Of Listing Current Price 52weeks 52 All All
Share Price Price After After 30 High Weeks Time Time
(Opening 31.07.2021 Days of Low High Low
&Closing) Listing
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
Tattva 1249.00- 2158.45 2310.25 2534.00 1083.00 2196.30 2131.05
chitha 1166.55
India 360.00- 325.90 343.15 368.00 296.00 338.95 323.40
pesticide 335.45
herbana 900.00- 837.60 815.25 945.00 602.10 866.85 838.00
812.25
rossari 670.00- 340.00 1440.25 1450.00 675.15 1396.00 1337.00
742.35
In existing scenario Lara labs, they went for a stock split in December and post-split it
is being listed for 270rs and the current price is 670inr per share
Technology and communication
Covid 19 has taken a major impact on technology and communication where there has
been no enjoyment in the out world where the impact has taken on shares where they have set
a great portfolio in order to be back on track
Listing Current 52 Week 52 Week All Time All Time Price
Name Of Price Price After High Low High Low After 30
the Share (Opening 31.07.2021 Days of
and Listing
Closing)
182.00- 486.00 507.30 161.00 497.00 465.55 474.70
Easy trip 208.30
Mtartech 990.05- 1324.00 1563.95 575.00 1346.00 1306.0 1330.95
1082.25
Rail Tel 109.00- 131.60 189.70 94.00 134.40 131.00 1324.00
108.25
Happiest 351.00- 1395.15 1580.00 166.00 1420.00 1375.00 337
minds 371.00
Nazra 1990- 1579.00 2024.00 1101.00 1709.90 1662.05 1679.00
1576.00
The analysis has proved that impact of covid is not a way to stop the ipo process
where it has built up a pavement for a greater way for technology and communication in
which they play a vital role.
Others
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
Other industry includes jewellery infrastructure construction which has a major set
back during covid times where the ipo process has been taken a good pavement in order to set
up a new platform of business techniques.
Name Of Listing Current Price 52 52 All All
The Stock Price Price After Weeks Week Time Time
(Openin After 30 High s Low High Low
g And 31.07.2021 Days of
Closing) Listing
Kalyan 73.90- 67.10 75.20 89.75 56.30 674.50 66.00
jewellery 75.30
Stove kraft 467.00- 850 800.75 850.00 385.00 816.900 795.00
445.95
Mazagon 216.25- 250 246.00 296.00 145.00 254.40 246.00
dock 173.00
Gr infra 1700.00- 350 1662.80 1838.00 837.00 1737.85 1645.00
1746.80
Food industry:
Food industry is one of the major industries which has contributing to economy while
food industry might classify with various identifications where they are important to know
how much they have a great survival technique to youngsters and family people. The table
shows as below
Name Listing Current Price 52 52 All All Time
Of The Price Price After 30 Weeks Weeks Time Low
Share (Opening After Days Of High Low High
And 31.07.2021 Listing
Closing)
Zomato 115.00- 133.85 126.00 147.80 76.00 139.75 132.10
125.85
Dodla 550.00- 598.30 609.10 652.00 428.00 607.90 591.50
dairy 609.10
Barbeque 492.00- 106.55 590.00 1217.00 481.85 1098.40 1057.455
nation 590.45
Bectors 501.00- 405.40 595.55 624.00 288.00 411.65 401.00
food 595.50
Burger 115.35- 170.50 135.00 213.80 60.00 173.90 167.10
king 138.40
Food industry being an eyeopeners for people where the verge of making the future
economy.
Banking and financial services:
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Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
Banking and financial services are the other part of the economy where there has a
mode of payments through debit cards, food cards, credit cards which is boon to employees
of all the sectors. banking and financial services has paved a part for the digitalization of the
economy in the fourth coming future generations. The table as follows
Name Listing Price Price 52 52 All All
Of the Price After After Weeks Weeks Time Time
Share (Opening 30 Days 31.07.2021 High Low High Low
and of
Closing) Listing
Angel 275.85- 832.25 832.00 1475.00 222.20 1247.20 1215.05
broking 274.80
Home 612.00- 581.00 581.00 640.00 440.00 567.15 691.55
first 575.80
Irfc 25.00- 20.00 205.00 26.70 20.80 24.15 23.70
24.85
Utiamc 490.25- 1043.00 104.00 471.00 471.00 1096.00 1030.00
476.00
Equitas 31.00- 33.00 60.15 30.05 61.65 61.65 60.30
bank 32.55
Banking and financial services provides an all-time word of commitment which make
more investors to think and make investments more and more.
Conclusion
Indian primary markets are the live examples for market trades during pandemic
which has been although the world. The road to an IPO consists mainly of putting together
the formal documents for the regulators and selling the issue to institutional clients.Markets
does not necessarily take into account only bad news and negative sentiments, but they
consider future possibilities, speedy economic recovery and strong revival when they make
their investments. need less to stay that outbreak provided a pandemic for a finishing and
this has been fully leveraged by the young investors with a higher return expectations and
risk appetite. As always, this only rephrases the fact, the market behaviour in unpredictable
and also paradoxical most of the times.
References: -
1. https://www.sciencedirect.com/science/article/abs/pii/S0275531918309280(google)
ICIDR International Journal Of Interdisciplinary Research [Type text] Page 8ICIDR International Journal Of Interdisciplinary Research
Vol. 1 No. 2 (2021): Impact of Covid-19 on Society
2. https://www.sciencedirect.com/science/article/pii/S0970389617305608
3. https://www.researchgate.net/publication/334106378_Earnings_Management_and_Perfo
rmance_of_IPO_Firms_Evidence_from_India
4. https://economictimes.indiatimes.com/tech/startups/ettech-clubhouse-one-or-two-
successful-tech-ipos-will-lead-to-huge-inflows/articleshow/81402601.cms
5. https://www.forbes.com/sites/suparnadutt/2017/05/18/startups-in-india-fail-due-lack-of-
innovation-according-to-a-new-ibm-study/?sh=6186a35e657b
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