IPOs with large issue-size tend to get a cold response on the listing day
Today, One 97 Communications or Paytm, got its shares listed in the exchanges at a discount of 9 per cent from its issue price. This broke the trend of startup listing gains. While we may think that this is a typical case for Paytm, it has been the trend for many other companies in the last five years. All those companies had one thing in common - massive issue-size.
If issue-size does really influence the listing gains of IPOs, then the result should be the opposite for the bottom-10 IPOs in the last five years. We did the number crunching and the result was glaring. The bottom-10 IPOs had median listing gains of 18.4 per cent.
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