In the literature, the underperformance of IPOs is a well-documented empirical anomaly.
This study concentrates on IPOs from the banking sector of an emerging economy, India.
In a developing country, the role of the banking sector for economic development
is undisputed. In view of its importance in economic resource allocation and its
distinction from other industries in general, this paper analyses the post offering
performance of banking sector IPOs in detail. The performance evaluation on the basis
of stock returns did not find significant evidences of underperformance for the IPOs
from the banking sector. Moreover, the study, based on key accounting parameters,
found improvement in the performance of the banks in the post-listing period. There
were no significant differences across ownership groups (public sector banks vis-à-vis
their private counterpart) in the IPO performance.