Publication Type

Master Thesis

Publication Date



The transition from being a private company to a public one is one of the most important events in the life of a firm. It is also one of particular interest to institutional investors, and the transition is facilitated through the initial public offering (IPO) process. The IPO provides a fresh source of capital that is critical to the growth of the firm and provides the founder and other shareholders such as venture capitalists a liquid market for their shares. From an institutional investor's perspective, the IPO provides an opportunity to share in the rewards of the growth of the firm.The purpose of this paper is to examine the long-run performance of IPOs in developing markets using various methods to ascertain the significance of the over or under-performance of IPOs. Among the many reasons for the performance which we see, one of them could be the sensitivity of the results to the choice of benchmarks. Dimson and Marsh, Ritter, Gregory et al., Fama and French and Fama have successively demonstrated the sensitivity of the long-run performance of the IPOs the benchmark used in the study. For this reason, I am also motivated to study the effect of various benchmarks on the return measurements so as to elucidate the possibility that the magnitude of the performance is benchmark dependent. Finally, the focus of this study will be the Chinese and Indian markets.


IPO, CAPM, three-factor models, stock price, under-pricing

Degree Awarded

MSc in Finance


Corporate Finance | Portfolio and Security Analysis


Sundaram Janakiramanan

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.