A number of researchers have examined the performance of Initial Public Offerings (IPOs) both for short and long run. However, the empirical evidence on the survivability of issues in the aftermarket is quite scant, especially in India. In the light of huge volatility in the Indian IPO market and the high rate of failure of IPOs, a need arises to explore the survivability of IPOs in the aftermarket. Hence, this paper attempts to examine the survival profile of Indian IPOs for the period 1992-2011. In order to examine the influence of issue-, market- and company-specific variables on the post-issue transition of IPOs into survivors and non-survivors, logistic regression model is estimated. Further, survival analysis methodology is employed to investigate the effect of observable factors on the survival time of the issue. The study reveals that issues with large size, more demand, backed by reputed lead managers and of older firms survive for longer duration. However, issues with high underpricing, high risk, more list delay and during the period of high market level as well as high IPO activity, survive for smaller duration in the aftermarket. The survival probability and the duration of IPO is positively affected if it belongs to information and communication, accommodation, construction, wholesale and retail trade, and finance and insurance sectors, and it is negatively affected if IPO belongs to agriculture and administration sectors.

An Initial Public Offer (IPO) is a significant stage in the evolution of a public company. For owners and managers of an unlisted company, such transition from private to public ownership is made after thorough considerations as it entitles the organization as well as its operations to entirely a new level of scrutiny by the public. Several parties that are associated with an IPO, such as regulators, investment bankers, venture capitalists, competitors and potential shareholders, evaluate the firm and its financial operations to gauge the likelihood of its success in the long run (Howton, 2006). Moreover, there are several risks associated with the fluctuations in capital market conditions and changes in investor sentiments towards the issue, which ultimately make it difficult for these firms to obtain additional finance to support growth in the long run (Jain and Kini, 2008). Due to all such risks associated with going public, a number of outcomes are possible. A firm may continue to operate as a viable concern, acquired by another firm, choose to go private again, or it may get liquidated. In the worst case, a company may be delisted, i.e., dropped from the exchange on which its securities are traded (Peristiani and Hong, 2004). Therefore, it is believed that the life of a firm is a ‘roller coaster ride’ wherein death is very difficult to define, especially for the public firms (Bhattacharya et al., 2011).

Financial Risk Management Journal, Initial Public Offer (IPO), Determinants, Survival of Initial Public Offerings, Hypotheses Development, India, An Empirical Study.