Mandatory Ipo Grading Reflections From The Indian Finance Essay

The research design used in this study of "MANDATORY IPO GRADING: REFLECTIONS FROM THE INDIAN CAPITAL MARKET" is Exploratory Research and Descriptive Research

Exploratory Research is used to know the impact of mandatory IPO Grading on the investment decision of the investors. The study intends to gauge the level of awareness of the entire IPO grading system so as to understand whether the investors are aware of the fact that the grades are given only on the basis of the fundamentals of an issue and are not signals or recommendation for buy/sell. The basic purpose of this research study is to find out whether the investors are considering IPO grades given by the Credit Rating Agency as a parameter before taking decision regarding investing in the IPO of equity shares. The study also attempts to explore the perception of the investors towards IPO grades and Credit Rating Agency. As the study is essentially meant to gain a better insight into the investors’ perception of mandatory IPO grading system and the CRAs, exploratory research is used.

Descriptive Research is used for the secondary data analysis to determine if there exists any relationship between IPO grades vis-à-vis Retail Subscription Rate and Listing Day gain. It is a valid method for researching specific subjects and to undertake more quantitative studies. The idea behind this type of research is to study frequencies, averages, and other statistical calculations. Also, the reliability of IPO Grades to predict actual future performance in post IPO secondary market scenario would be tested through relative comparison with an index over a period of time.

OBJECTIVES

To determine the investor’s perception and take on the IPO Grades and IPO Grading System.

To examine the factors that influence investor’s investment decision in an IPO.

To understand the Investors’ perception about Credit Rating Agencies and its working.

To test the efficacy of IPO grading regulation on two questions :

Should Retail investors invest more in the high graded IPOs compared to low graded IPOs?

Do High graded IPOs lead to more listing day gains as compared to low graded IPOs?

To determine the extent of reliability of IPO Grades and find if they indicate actual future performance.

DESCRIPTION OF POPULATION, SAMPLE AND SAMPLING DESIGN

This research study deals with finding out the Effects of IPO Grading on Investment Decision & Investor's Perception. Hence a primary research will be undertaken for the purpose of understanding the opinions of the investors towards the process of IPO grading, grades and CRAs.

Population - Retail Investors of Delhi region.

Sample Size - A total of 152 investors surveyed. The sample size is selected on the basis of prior research conducted by Bheemanagouda and J Madegowda (2010) conducted in Karnataka.

Sampling Design - Judgmental sampling method.

Sample Size for Secondary Data: The sample size of secondary data would consist of all the IPOs issued and listed on NSE in the year 2010. A total of 56 IPOs were analyzed.

DATA COLLECTION PROCEDURES

Primary Data –

A close – ended Questionnaire is designed to collect primary data which will be circulated through - E-mail.

Secondary Data

Information about IPO grades, Issue Price, NSE Data, oversubscription and listing day gains will be obtained from -

www.bseindia.com

www.nseindia.com

www.crisil.com

www.icra.in

PILOT STUDY

A Pilot Survey was conducted of 20 samples. The questionnaire was circulated through the same medium as mentioned above.

RELIABILITY ANALYSIS OF THE VARIABLES SELECTED IN INSTRUMENT:

IPO GRADING –

Cronbach's Alpha

N of Items

.669

9

Table 3.1: Reliability Statistics of IPO Grading

INVESTMENT PERCEPTION –

Cronbach's Alpha

N of Items

.887

15

Table 3.2: Reliability Statistics of Investment Perception

As per Naresh Malhotra (2010), a Cronbach’s Alpha score of 0.6 or more is considered reliable. Both the scores as per the Pilot Survey conducted shows the variables of the instrument to be reliable to highly reliable. Hence, we can go ahead with the primary survey.

The respondents’ profile was broadly as follows –

Number of IPOs applied till date

Figure 3.1 – Number of IPOs applied by Respondents’ till date

80% of the respondents had applied in less than 5 IPOs till date while only 20% respondents applied for 5 to 15 IPOs.

Awareness of IPO Grading Concept

Figure 3.2 – Respondents’ Awareness of IPO Grading

85% of respondents were aware of the Concept of IPO Grading while 15% respondents were not.

Conclusions from the Pilot Study –

The Pilot Study showed that 85% of the respondents were aware of the concept of IPO Grading while 80% of them made use of it. This high percent shows that retail investors are making appropriate use of the mandatory IPO grading system introduced by SEBI with the objective of providing additional information for investors. While on preference of CRA was as - CRISIL, ICRA, CARE and FITCH, investors had mixed response when asked their view if the cost of grading is transferred on to them. But when it came to factors influencing investment decision, IPO Grading was not considered very important as it received a score of 2 by 55% of respondents.

The Pilot Study showed appropriate results and the questionnaire was found to be fulfilling the research questions. The reliability score is also high. Hence, a final survey can be conducted on the same questionnaire.

DESCRIPTION OF HOW DATA WILL BE ANALYZED

The data obtained through primary research will be analyzed through statistical software SPSS. Various tests would be carried to know the impact of IPO Grading on investors’ decision and their perception of the whole system. For the first three objectives the following tests will be applied –

Investors’ Perception on IPO Grading System: t – test, Crosstabs.

Factors influencing Investment: Factor Analysis.

Investors’ Take on CRA: Cross Tabs, Kruskal-Wallis Rank Test

Secondary data would be analyzed by applying t-test and averages to know the efficacy of IPO grading and impact on Retail Subscription alongwith Listing Day gains.

CHAPTER 4: DATA ANALYSIS AND FINDINGS

SECONDARY DATA ANALYSIS

The secondary data analysis would answer to the following Research Questions -

What is the efficacy of IPO grading regulation on two questions :

Do Retail investors invest more in the high graded IPOs compared to low graded IPOs?

Do High graded IPOs lead to more listing day gains as compared to low graded IPOs?

What is the extent of reliability of IPO Grades? Do they indicate actual future performance?

For Secondary Data Analysis, IPOs that came in the year 2010 and were listed on NSE were taken into consideration. A total of 56 IPOs are considered for the analysis.

IPO Grades v/s Retail Subscription

Do Retail investors invest more in the high graded IPOs compared to low graded IPOs?

To analyze the above research question, Over – Subscription by the Retail Investors is taken into consideration.

Step: 1 - Hypothesis

Null Hypothesis – Grades does not impact Subscription Rate by Retail Investors

Alternate Hypothesis – Grades does impact Subscription Rate by Retail Investors

Step: 2 – Significance Level:

α = 0.05

Step: 3 - Critical Value and Rejection Region:

Reject the null hypothesis if p-value ≤ 0.05.

Step: 4 – Test Statistic

ANOVA Test is applied to test the hypothesis

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

205.792

1

205.792

2.329

.133a

Residual

4770.713

54

88.347

Total

4976.505

55

a. Predictors: (Constant), Grade

b. Dependent Variable: Retail_Subscription

Table 4.1: ANOVA Test for IPO Grades v/s Retail Subscription

Step: 5 - Conclusion

Since p-value = 0.133 > 0.05, we shall accept the null hypothesis.

Step: 6 - State conclusion in words

At α = 0.05 level of significance, there does not exists enough evidence to conclude that the IPO Grades affects the Retail Subscription.

Linear Regression Analysis

Model Summaryb

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.203a

.041

.024

9.39928

a. Predictors: (Constant), Grade

b. Dependent Variable: Retail_Subscription

Table 4.2: Regression Analysis of IPO Grades v/s Retail Subscription

The R value is 0.203, which represents the simple correlation and, therefore, indicates a very low degree of correlation i.e. almost no correlation. The R2 value indicates how much of the dependent variable, Retail Subscription, can be explained by the independent variable, IPO Grades. In this case, 4.1% variability in Retail Subscription can be explained by IPO Grades which is very low. Thus, our Null Hypotheses holds true i.e. Grades does not impact Retail Subscription.

IPO Grades v/s Listing Day Gains

Do High graded IPOs lead to more listing day gains as compared to low graded IPOs?

To analyze the above research question, Listing Day Gains are calculated as follows:

Listing Day Gains =

Step: 1 - Hypothesis

Null Hypothesis – There is no relationship between IPO Grades and Listing Day Gains.

Alternate Hypothesis – There is a relationship between IPO Grades and Listing Day Gains.

Step: 2 – Significance Level:

α = 0.05

Step: 3 - Critical Value and Rejection Region:

Reject the null hypothesis if p-value ≤ 0.05.

Step: 4 – Test Statistic

ANOVA Test is applied to test the hypothesis

ANOVAb

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

25.091

1

25.091

.028

.867a

Residual

47887.926

54

886.813

Total

47913.017

55

a. Predictors: (Constant), Grade

b. Dependent Variable: Listing_Gains

Table 4.3: ANOVA Test for IPO Grades v/s Listing Day Gains

Step: 5 - Conclusion

Since p-value = 0.867 > 0.05, we shall accept the null hypothesis.

Step: 6 - State conclusion in words

At α = 0.05 level of significance, there does not exists enough evidence to conclude that there is any relationship between IPO Grades and Listing Day Gains. Hence, High graded IPOs does not lead to more listing day gains as compared to low graded IPOs

Diagrammatic Representation of Average Listing Day Gains w.r.t. IPO Grades

Figure 4.1: Average Listing Day Gains w.r.t. IPO Grades

As it can be clearly seen from the Average Listing Day Gains that Grade 1 IPOs return -23.47% while Grade 4 IPOs return 6.54% which is lesser than the returns by Grade 2 and Grade 3 IPOs.

Linear Regression Analysis

Model Summaryb

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.023a

.001

-.018

29.77941

a. Predictors: (Constant), Grade

b. Dependent Variable: Listing_Gains

Table 4.4: Regression Analysis of IPO Grades v/s Listing Day Gains

The R value is 0.023, which represents the simple correlation and, therefore, indicates no correlation. The R2 value indicates how much of the dependent variable, Listing Day Gains, can be explained by the independent variable, IPO Grades. In this case, only 1% variability in Listing Day Gains can be explained by IPO Grades which is almost nothing. Thus, our Null Hypotheses holds true i.e. Grades does not impact Listing Day Gains.

Reliability of IPO Grades

What is the extent of reliability of IPO Grades? Do they indicate actual future performance?

Credit Rating Agencies (CRAs) virtually do not have any accountability if the post-issue scenario erodes the wealth of the investors. Therefore, if an investor follows a grade 5 recommendation of an issue and if the share crashes on the listing day as in many cases, the investor cannot ask for compensation from the CRAs for any losses as the CRAs only give an opinion and not a recommendation or surety. In fact the CRA does not have any interface or votive with the investor, who is the end user and for whose assistance the entire infrastructure of mandatory IPO grading system is supposed to cater to.

To test whether IPO Grades can be relied on for future performance of the stock, an empirical analysis is conducted which would take into consideration the 56 IPOs listed between January 2010 and December 2010.

Empirical Analysis:

The following analysis is done to test whether the IPO grades are an indication of the actual future performance of the stock:

1. Compute the returns of the stock on listing w.r.t. issue price.

2. Compute the returns of the stock one year from the date of listing w.r.t. issue price.

3. Find the relative gain/loss of the stock w.r.t. a benchmark index (here Nifty) to compensate for the systematic risks.

4. If the relative return of the stock is negative, we shall consider the IPO as "Failure".

The retail investor very often expects and believes that an IPO with a higher grade would have lower failure rate. Ideally, the investors will expect IPOs with Grade 4 and 5 IPOs to be successful as they have been awarded with "Above average fundamentals" and "Strong fundamentals".

Post Listing Returns -

Out of the total 56 IPOs which got listed between January 2010 and December 2010 and were considered for this study, 42 of them delivered negative returns and 41 delivered relative negative returns i.e. relative performance of the stock with respect to Nifty. The negative return was as high as -83.48% while the relative return was lowest at -85.81%. December 2010 is taken as the cut-off date as computing the one year return is one of the critical parameters in determining the success/failure of any issue.

Grade

Failed IPOs

Total IPOs

Average Relative Returns

Failure Rate

1

1.00

1.00

-78.80

100.00

2

19.00

20.00

-42.76

95.00

3

10.00

18.00

18.04

55.56

4

13.00

15.00

-20.90

86.67

5

1.00

2.00

14.40

50.00

Table 4.5: IPO Performance

Figure 4.2: IPO Grades

From Figure (a), 62% out of 56 i.e. 35 issues received either Grade 3, Grade 4 or Grade 5 which indicates that the issuing companies must be having atleast average fundamentals. Therefore even if we ignore the timing of the issue which may drive down the prices despite good fundamentals, we will consider the returns of the stock one year from date of listing which is sufficient enough to even out periods of high volatility in secondary markets. Again the criteria for failure of the IPO would be the relative performance and not absolute performance to account for market conditions.

Figure 4.3: Failure Rate of IPO

Applying the rule for failure of an IPO as discussed above for our time period of analysis, we find that the failure rate increases with the decrease in grading except for Grade 4. The salient aspect being that for Grade 4 IPOs, the failure rate is as high as 86.67% and which is even higher than the IPOs that received Grade 3. This shows that IPOs with Grade 3 are faring better than Grade 4 IPOs after 1 year of listing. Even for Grade 5 issues which are supposed to be "Strong Fundamentals", the failure rate is 50%. For Grade 1 and 2, the failure rate is as high as 100% and 95% respectively. Therefore practically, any issue with grading Grade 1, Grade 2 or Grade 4 would have almost similar failure rates irrespective of the fundamentals of the company even when the market conditions are accounted for. Therefore, the investors have to reconsider the relevance of IPO grading as a factor while deciding whether or not to subscribe for an issue.

Figure 4.4: Average Relative Returns

Figure (c) shows the average returns generated by the cluster of each IPO grade. On an average basis, Grade 1 has the least return but that doesn’t mean that issues in other Grading segments fare better. Factually, Grade 2 has the highest number of negative return earning issues with the least being of -85.81% returns of DB Realty. Interestingly, Grade 3 issues such as Jubilant Foodworks, Thangamayil Jewellery, Talwalkars Better Value Fitness and Gravita India produced higher returns than the highest returns provided by Grade 4 stocks with Gravita India giving the highest return of 269.64% for the time period considered. In Grade 4 stocks, it was Eros International Media Limited and Gujarat Pipavav port which earned the highest returns of 55.47% and 53.88% respectively. In Grade 5 Coal India returned a positive increment of 49.06% while Moil India returned negative returns of -20.27%

There seems to be no relevancy of grades with returns given. Higher Grades does not result into higher gains. There appears to be no correlation when the returns of issues in one Grade are compared with returns of the other.

Linear Regression Analysis

Step: 1 - Hypothesis

Null Hypothesis – There is no relationship between IPO Grades and Relative Returns after one year.

Alternate Hypothesis – There is a relationship between IPO Grades and Relative Returns after one year.

Step: 2 – Significance Level:

α = 0.05

Step: 3 - Critical Value and Rejection Region:

Reject the null hypothesis if p-value ≤ 0.05.

Step: 4 – Test Statistic

ANOVA Test is applied to test the hypothesis

ANOVAb

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

10733.817

1

10733.817

2.440

.124a

Residual

237560.118

54

4399.261

Total

248293.935

55

a. Predictors: (Constant), Grade

b. Dependent Variable: Relative_Returns

Table 4.6: ANOVA of Relative Returns

Step: 5 - Conclusion

Since p-value = 0.124 > 0.05, we shall accept the null hypothesis.

Step: 6 - State conclusion in words

At α = 0.05 level of significance, there does not exists enough evidence to conclude that there is any relationship between IPO Grades and Relative Returns after one year. Hence, High graded IPOs does not lead to Relative Gains after one year of listing vis-à-vis Nifty. Therefore, IPO Grades cannot indicate actual future performance and neither can they be relied upon.

Model Summaryb

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.208a

.043

.026

66.32693

a. Predictors: (Constant), Grade

b. Dependent Variable: Relative_Returns

Table 4.7: Regression of Relative Returns

The R value is 0.208, which represents the simple correlation and, therefore, indicates a very low degree of correlation i.e. almost no correlation. The R2 value indicates how much of the dependent variable, Relative Returns, can be explained by the independent variable, IPO Grades. In this case, 4.3% variability in Relative Returns can be explained by IPO Grades which is very low. Thus, Grades does not impact Relative Returns and can’t help in predicting future performance of the stocks.

PRIMARY ANALYSIS

Mandatory IPO Grading – Reflections from the Indian Capital Market

A Primary Analysis of its Effects on Investor's Perception & Investment Decision

DEMOGRAPHIC DETAILS

The Details pertaining to the Gender and Age Group of the Respondents of the Survey conducted to know Effects of Mandatory IPO Grading on Investor's Perception & Investment Decision:

Figure 4.6: Age - Group of Respondents

Figure 4.5: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender

Figure 4.1: Respondents’ Gender79% of the Investors surveyed were Male while meager 32 Females formed the remaining part of respondents.

78 Respondents belong to 18 – 27 years Age group which shows the increase in number of young people investing in the capital market.

42 Respondents belong to 28-37 years Age Group while the Age Group of 38- 47 had 25 Respondents.

Only 7 Respondents belong to the Age Group of 48 and above.

INVESTORS’ PROFILE

Q. What is your annual investment in the Stock Market?

Figure 4.7: Annual Investment in Stock Market

95 Respondents invested in the range of Rs.0 – Rs.50,000 which is also because of the fact that majority respondents belonged to the young class who has newly started earning.

While the range Rs.50,000 – Rs.1,00,000 and More than Rs.1,50,000 had almost equal number of Respondents, only 4% Respondents belong to Rs.1,00,000 – Rs.1,50,000 range.

Q. Since how many years have you been investing in the Stock Market?

Figure 4.8: Since how many years investing in Stock Market

64 Respondents had newly started investing in the stock market, the reason maybe the cheaply available Blue Chip shares during the last one year when the entire share market took a toll of Global Crisis or Surplus Income of many respondents.

33% of the Respondents were investing since 1 year to 3 years while 27 were associated with the market from 3 years to 5 years.

5 Respondents had been investing since 5 years to 10 years while 4 Respondents had been long associated with the market and their relationship was as long as more than 10 years.

Q. How many IPOs have you applied for till date?

Figure 4.9: No. of IPOs applied till date

65% of the Respondents had invested in less than 5 IPOs. This may be because of the fact that 64 Respondents had started investing just from last year. Also, in 2011 only 37 IPOs were successfully listed and out of that many were graded with poor and below average fundamentals.

Only 9 Respondents had applied for more than 15 IPOs and all of them were associated with the market for more than 3 years.

IPO GRADING

Q. Do you understand the Grades assigned by Credit Rating Agencies (CRA) and do you consider them before investing?

Figure 4.10: Understanding of IPO Grading & Consider IPO Grading Crosstabulation

80% of the Respondents told they understood the IPO Grades assigned by the Credit Rating Agencies while 20% of the investors were unaware of the concept. The system of IPO Grading has been introduced by SEBI to provide additional inputs to the retail investors before taking investment decision. But 20% illiteracy of the concept calls for Initiation of Financial Literacy drive by SEBI.

Out of 122 Respondents who understood the Grading, 14 of them did not consider it to be criteria while investing while 26 investors considered the grades though they didn’t understood what it actually shows.

This blindly follow of grading by 26 respondents may lead them to believe Grades as Recommendations and not an Opinion.

Q. What is the No. of IPOs applied by you and did you consider IPO Grades?

Figure 4.11: Understanding of IPO Grading & Consider IPO Grading Crosstabulation

30 Respondents who had applied for less than 5 IPOs did not consider the Grades which may have resulted in their applying of IPOs with Poor Fundamentals and Below Average Fundamentals which has a high rate of not performing as against the market.

All the Respondents with IPOs application of more than 15 did consider the Grades before investing. A total of 9 Respondents fall into this category. This is a startling fact which also shows that with increase in number of years in the market investing, people do start considering the grades.

Overall, there were 74% of respondents falling in various IPO Application categories who did consider the grades before investing.

Q. Do Investors’ who understand IPO Grades think that IPO Grades can predict post IPO secondary market liquidity and risk?

Figure 4.12: Understanding of IPO Grading & can predict post IPO Grading Crosstabulation

Perhaps the most critical factor while subscribing for any issue from the perspective of a retail investor would be its issue price. But the grading process and the exercise does not include any comment on the price band of the issue. In fact, the price band is not even determined by the Investment Bankers/ Issuers till the time grading is obtained. Also, the Grades are CRAs’ opinion on the Fundamentals of the Issue and not a recommendation that the Issue would do well Post IPO in secondary market.

The investors’ who claim to understand the IPO Grades and still believe that they can predict actual future performance are unaware of basic factors considered by CRAs and are with wrong interpretations in their mind which could prove fatal post IPO.

An astounding 29% of the respondents who claim to understand the grading believe the untrue. In order to remove possible misconception SEBI needs to bring in a mandate where it becomes necessary for the CRAs to prominently display on the grading document that the price of the issue has not been accounted, when the grade was assigned to the issue.

Q. What do Investors think about the grades assigned by CRA?

One Sample t-test is applied to check whether a positive consensus is formed among the respondents regarding the grades assigned by CRAs. Investors’ Perception is obtained on the four basic pillars of IPO Grades and an unbiased opinion by CRA.

One-Sample Statistics

N

Mean

Std. Deviation

Std. Error Mean

IPO Grades reflect the Business & Competitive Position of the Company

152

3.57

1.014

.082

IPO Grades reflect the Financial Position and Prospects

152

3.73

.913

.074

IPO Grades reflect the Management Quality

152

3.43

.896

.073

IPO Grades reflect the Corporate Governance practices

152

3.25

.937

.076

IPO Grades are Reliable

152

3.51

.913

.074

IPO Grades are Free from Biases

152

3.13

.961

.078

Table 4.8: One Sample Statistics of what investors think about IPO Grades

One-Sample Test

Test Value = 3

95% Confidence Interval of the Difference

t

df

Sig. (2-tailed)

Mean Difference

Lower

Upper

IPO Grades reflect the Business & Competitive Position of the Company

6.877

151

.000

.566

.40

.73

IPO Grades reflect the Financial Position and Prospects

9.858

151

.000

.730

.58

.88

IPO Grades reflect the Management Quality

5.885

151

.000

.428

.28

.57

IPO Grades reflect the Corporate Governance practices

3.290

151

.001

.250

.10

.40

IPO Grades are Reliable

6.927

151

.000

.513

.37

.66

IPO Grades are Free from Biases

1.689

151

.093

.132

-.02

.29

Table 4.9: One Sample t-test of what investors think about IPO Grades

Interpretation:

Investors’ agree on all the four pillars of IPO Grades viz.

IPO Grades reflect the Business & Competitive Position of the Company

IPO Grades reflect the Financial Position and Prospects

IPO Grades reflect the Management Quality

IPO Grades reflect the Corporate Governance practices

The only aspect where it fails is the Investors’ Perception on Whether the IPO Grades are free from Biases as p = 0.093 > 0.05 at 5% Level of Significance. This means that investors believe that grades can be manipulated easily. Obviously, the issuer pays and remunerates all other agencies like the merchant bankers and brokers at the front end and the rating agency and the registrar & transfer agent at the back end. Moreover, for the rating agencies it is the very nature of such fees that constitute the bread and butter of their total revenue. Hence, the fairness of grading has come under fire and more so after the recent financial crisis. This has led them to believe about the biasness of grades.

Q. Is there any relationship between Investors’ take on biasness in IPO Grades and Working of Credit Rating Agency?

Step: 1 - Hypothesis

Null Hypothesis – There is no relationship between Investors’ take on biasness in IPO Grades and Working of Credit Rating Agencies.

Alternate Hypothesis – There is a relationship between Investors’ take on biasness in IPO Grades and Working of Credit Rating Agencies.

Step: 2 – Significance Level:

α = 0.05

Step: 3 - Critical Value and Rejection Region:

Reject the null hypothesis if p-value ≤ 0.05.

Step: 4 – Test Statistic

Working of Credit Rating Agency * IPO Grades are Free from Biases Crosstabulation

Count

IPO Grades are Free from Biases

Total

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Working of Credit Rating Agency

Works Independently & Objectively

0

11

40

27

12

90

Do not work Independently & Objectively

3

13

10

6

0

32

Can’t Say

2

9

14

4

1

30

Total

5

33

64

37

13

152

Table 4.10: Working of Credit Rating Agency * IPO Grades are Free from Biases Crosstabulation

Chi-Square Tests

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

27.905a

8

.000

Likelihood Ratio

31.934

8

.000

Linear-by-Linear Association

17.202

1

.000

N of Valid Cases

152

a. 5 cells (33.3%) have expected count less than 5. The minimum expected count is .99.

Table 4.11: Chi – Square: Working of Credit Rating Agency * IPO Grades are Free from Biases

Step: 5 - Conclusion

Since p-value = 0.000 < 0.05, we shall reject the null hypothesis.

Step: 6 - State conclusion in words

At α = 0.05 level of significance, there exists enough evidence to conclude that there is a relationship between Investors’ take on biasness in IPO Grades and Working of Credit Rating Agencies. They feel that there are mutually related.

Q. Would you invest in a Poorly Graded (1/5) IPO of a well – known and old company like TATA or Reliance?

Figure 4.13: Invest in poorly graded IPOs

An astounding 59% of investors told that they would still be investing in an IPO though it received 1/5 ratings as it belonged to a well – known company.

This result raises question on the viability of the IPO Grades and SEBI’s decision to make it mandatory.

The results can mean that in the Indian Capital Market, Brand Name holds utmost importance and a poor grade by CRA cannot prevent the investors to apply for it.

Q. Do you want the mandatory IPO Grading system to continue in India and what if its cost is to be shared by you as well?

The company desirous of making the IPO is required to bear the expenses incurred for grading an IPO.

Initially, when the system was brought in, it was said that SEBI would bear the expenses of grading.

But eventually, it was transferred onto the Issuer and this led to the increase in cost of raising money.

Now, the debate is whether the cost can be transferred onto the Investors.

Figure 4.14: Crosstabulation-Mandatory IPO Grading to continue & cost is to be shared

35 out of the 143 Respondents who told that Mandatory IPO Grading System should be continued in India disapproved the proposal of sharing the cost of grading.

While 9 Respondents were not interested in continuation of IPO Grading and neither ready to share the cost.

Henceforth, SEBI needs to find a middle way out of this. As not transferring the cost is leading to increase in cost of raising capital and it is one of the hurdle especially for small firms. While retail investors are not ready to share the cost of this independent research conducted by CRAs

CREDIT RATING AGENCIES

Q. Rank the following Credit Rating Agencies as per your preference

Kruskal-Wallis Test is run to Rank the four CRAs considered by investors.

Ranks

N

Mean Rank

CRA

1.00

152

266.50

2.00

152

354.50

3.00

152

162.50

4.00

152

434.50

Total

608

Table 4.12: Kruskal-Wallis Rank Test of four CRAs

In ranking, as 1 means maximum and 4 means minimum, the lowest mean rank would be considered to be 1st and so on.

In the above table, 1 = ICRA, 2 = CARE, 3 = CRISIL & 4 = FITCH.

Ranks

CRA

1

CRISIL

2

ICRA

3

CARE

4

FITCH

Table 4.13: Ranks of four CRAs

CRISIL is ranked No.1 in our study, with 92 Investors preferring CRISIL as No.1 over other CRAs.

FITCH was the least preferred CRA by the Investors with Rank 4 Score of 93. The mean rank also shows the same.

The question of ranking the CRAs as per the preference is very important because of times when an Issue is graded by more than one agency, 47% of the respondents told that they would go with the rating by their preferred CRA.

Thus, it becomes necessary for CRAs to build trust among the investors and build their brand which would in turn help them in long run.

Q. What do you think about the working of Credit Rating Agencies?

The high number of IPOs graded well but underperforming as compared to the market has brought the fairness of grading under fire and more so after the recent financial crisis.

Many companies around the world that were graded very high failed and investors lost lot of money in them. This has led to raise questions on the working of Credit Rating Agencies.

Out of the 56 IPOs listed on NSE in 2010, 41 were giving relative negative returns even after a year. 24 of the 41 IPOs belong to average and above fundamentals category.

Figure 4.15: Working of CRAs

21% of the respondents were of the opinion that CRAs do not work independently and objectively. This tarnished image of CRAs is the result of recent IPO failures. It becomes very important for CRAs to work on regaining investors’ confidence back.

Also, 20% of the respondents were not sure about the working of CRAs which again is a threat to the image of CRAs in the country.

Almost 40% were those who did not firmly agree on the independency and objectivity of the working of CRAs.

Q. What is your opinion on Grading by more than one CRA?

Do you think there is a need of IPO Grading of an Issue by more than one CRA?

With high no. of IPO failures, grading of an issue by more than one CRA would help the investors in better judgement of the issue. A second opinion is never harmful.

Figure 4.16: Need for Grading by more than one CRA

Which grade would you consider if different CRAs have assigned different IPO grades?

Figure 4.17: Grade considered when grading by more than one CRA

47% of the respondents told that they would go with their preferred CRA while 7% would not consider if the grades given are different by various CRAs.

42 respondents would go with the higher grading while 28 would adopt a conservative approach and go for the lower grading.

FACTORS AFFECTING IPO INVESTMENT DECISION

A total of 15 factors were examined to know what affects Investors’ decision of investing in an IPO.

Factor Analysis was used to reduce the number of factors.

The following are the factors examined –

Factors influencing Investment Decision in an IPO

Own Judgment

IPO Grading

Advise of brokers/ broking house

Expert opinions

Industry prospectus

Company Background

Promoters’ of the company

Recommendations by family & friends

Name of the underwriters of the IPO issue

Future prospectus of the business

Brand name of the company

Management of the Organization

Past financial records if available

Economic Scenario

Review of issuer-organization in print/e-media

Table 4.14: Factors influencing Investment Decision in an IPO

Factor Analysis

Kaiser-Meyer-Olkin (KMO) and Bartlett’s Test

KMO and Bartlett’s Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.824

Bartlett’s Test of Sphericity

Approx. Chi-Square

762.460

df

105

Sig.

.000

Table 4.15: KMO and Bartlett’s Test

The first item from the output is the Kaiser-Meyer-Olkin (KMO) and Bartlett’s test.

The KMO measures the sampling adequacy which should be greater than 0.5 for a satisfactory factor analysis to proceed.

With KMO measure of 0.824, we can proceed with the factor analysis.

From the same table, we can see that the Bartlett’s test of sphericity is significant. That is, its associated probability is less than 0.05.

Communalities:

Communalities

Initial

Extraction

Own Judgment

1.000

.656

IPO Grading

1.000

.670

Advise of brokers/ broking house

1.000

.651

Expert opinions

1.000

.770

Industry prospectus

1.000

.597

Company Background

1.000

.625

Review of issuer-organization in print/e-media

1.000

.639

Recommendations by family & friends

1.000

.636

Name of the underwriters of the IPO issue

1.000

.645

Future prospectus of the business

1.000

.533

Management of the Organization

1.000

.568

Past financial records if available

1.000

.713

Economic Scenario

1.000

.529

Promoters’ of the company

1.000

.599

Brand name of the company

1.000

.508

Extraction Method: Principal Component Analysis.

Table 4.16: Communalities of Factor Analysis

The next item from the output is the table of communalities which shows how much of the variance in the variables has been accounted for by the extracted factors.

For instance over 67% of the variance in IPO Grading is accounted for while 77% of the variance in Experts’ Opinion is accounted for.

Total Variance Explained:

The next item shows all the factors extractable from the analysis along with their eigenvalues, the percent of variance attributable to each factor, and the cumulative variance of the factor and the previous factors.

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

1

5.085

33.902

33.902

5.085

33.902

33.902

3.745

24.966

24.966

2

1.744

11.625

45.527

1.744

11.625

45.527

1.980

13.199

38.164

3

1.194

7.962

53.489

1.194

7.962

53.489

1.954

13.025

51.190

4

1.115

7.435

60.924

1.115

7.435

60.924

1.460

9.734

60.924

5

.910

6.064

66.988

6

.791

5.271

72.259

7

.711

4.740

76.999

8

.607

4.046

81.045

9

.576

3.838

84.883

10

.499

3.324

88.207

11

.450

3.002

91.209

12

.403

2.685

93.894

13

.373

2.484

96.378

14

.284

1.893

98.272

15

.259

1.728

100.000

Table 4.17: Total Variance Explained of Factor Analysis

As you can see in the above table, only four factors have Eigen values more than 1. Hence, four factors can be extracted from this.

Notice that 1st factor accounts for 33.902%, the 2nd 11.625%, 3rd 7.962% and 4th for 7.435% variance. All the remaining factors are not significant.

Rotated Component Matrix:

The table below shows the loadings of the fifteen variables on the four factors extracted. The higher the absolute value of the loading, the more the factor contributes to the variable. The gap on the table represent loadings that are less than 0.5, this makes reading the table easier. We suppressed all loadings less than 0.5. The idea of rotation is to reduce the number factors on which the variables under investigation have high loadings. Rotation does not actually change anything but makes the interpretation of the analysis easier.

Rotated Component Matrixa

Component

1

2

3

4

Own Judgment

.734

IPO Grading

.610

Advise of brokers/ broking house

.736

Expert opinions

.815

Industry prospectus

.686

Company Background

.765

Review of issuer-organization in print/e-media

.682

Recommendations by family & friends

.596

Name of the underwriters of the IPO issue

.755

Future prospectus of the business

.641

Management of the Organization

.650

Past financial records if available

.822

Economic Scenario

.635

Promoters’ of the company

.658

Brand name of the company

.553

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 7 iterations.

Table 4.18: Rotated Component Matrix of Factor Analysis

Looking at the table below, we can see that Own Judgement and Recommendation by family and friends are substantially loaded on Factor (Component) 4 while Review of issuer-organization in print/e-media, Name of the underwriters of the IPO issue, Promoters’ of the company and Brand name of the company are substantially loaded on Factor 3. IPO Grading, Advise of brokers/ broking house and Expert opinions are loaded on Factor 2. All the remaining variables are substantially loaded on Factor 1. These factors can be used as variables for further analysis.

Henceforth, we can broadly classify the 15 factors under the following 4 broad categories –

Factor Analysis Results

Economic Viability

Industry prospectus

Company Background

Future prospectus of the business

Management of the Organization

Past financial records if available

Economic Scenario

Experts’ Perception

IPO Grading

Advise of brokers/ broking house

Expert opinions

Brand Image & Trust

Review of issuer-organization in print/e-media

Name of the underwriters of the IPO issue

Promoters’ of the company

Brand name of the company

Personal Factors

Own Judgment

Recommendations by family & friends

Table 4.19: Factor Extraction and Classification of Factor Analysis

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS

CONCLUSION

Considering the above facts and analysis done on the secondary data, the investors can hardly make any decisions based solely on the IPO grading and hence reliability on grades issued to an IPO should be kept lower with more emphasis provided to some other constraints such as the valuations of the company, pricing of the issue or the sector/economy in which the company is operating. The general presumption of Higher Grade IPO performing better in the post IPO secondary market has been proved wrong through the analysis of various IPOs listed in year 2010. Also, Grading has nothing to do with the amount of subscription the issue receives or the listing day gains.

The present growing concern which has brought the issue of the mandatory IPO grading at the trial is that the issuers which have been assessed at a high grade are not performing as per the expectation while those graded low are performing better than these. Many analysts believe that mandatory grading requires amendment since grading does not reflect in the performance of issues in the market. Even the performance of 13 IPOs that were given four grades out of five (highest) in 2010 is worse than those graded at three points. No doubt the retail investors may have benefited by this regulation but the criticisms may overshadow it.

However, on the positive side with the advantages it carries, the proposed grading system would no doubt serve as an additional input towards assisting the average Indian investor. Further, the absence of an international precedent should not be a reason to reject the idea even before it begins to show results. IPO grading, as a progressive and innovative regulation, can surely become an internationally accepted practice due to almost universal acceptance of the principle that investor protection lies at the heart of the goal of orderly development of efficient markets.

It must however also be realized that it is not reasonable to expect IPO grading to yield instant results or serve as the panacea for all evils inflicting the IPO markets. It may be worthwhile to conclude by observing that while the general trend in the regulatory approach internationally is that of a more so ‘reactive’ nature, the proposal of SEBI coming out with the idea of IPO grading, without a pre-existing fault to serve, marks the shift to a ‘proactive’ market regulation model. In this regard, the proposal of IPO grading is certainly a milestone. While no doubt the approach should continue, more groundwork needs to be undertaken in analysing the pros and cons of the issue.

Investors who were examined also were in the favour of continuation of the process. Henceforth, it becomes necessary for SEBI to bring about reforms in the framework to make this innovative approach of great help to investors and bring in regulations for better scrutiny of the CRAs.

When it came to factors affecting investment decision in an IPO, it was concluded that four major factors were considered by respondents –

Economic Viability

Brand Image

Experts’ Perception

Personal Factor

RECOMMENDATIONS

Retail Investors: Gather and analyse more information from media and experts -

As concluded above that relying on IPO grading is not sufficient and that investors have to use their prudence in arriving at and executing an investment decision. The grading is meant for a wide audience and in no way considers the risk-return profile of any individual or investor class. Hence, the individual retail investor has to assess his risk profile and return expectations with respect to that of the issue. This process may be cumbersome for a naïve investor and hence, it is advisable for such investors to seek the guidance of an expert such as a financial planner before proceeding to invest in any issue.

Credit Rating Agencies: Disclosure that price is not recommended by the rating agency–

The rating agencies in order to remove possible misconception in the minds of retail investors, should prominently display on the grading document that the price of the issue has not been accounted, when the grade was assigned to the issue. This would make the investor aware that the extent to which the rating agencies have scrutinised the issuer and the issue. Accordingly, the investor can undertake more research before investing in the issue.

Demutualize CRAs and Issuers –

There is a sort of conflict of interest as the issuer organizations provide business to the rating agencies and make payment for initial rating and surveillance in the form of fees. The survival of rating agencies depends, to a great extent on the businesses offered and fees paid by these issuer organizations whose instruments are rated. Therefore, some suspect that the agencies work for the benefit of the issuer organizations by grading their instruments on the higher side. Hence, there is a dire need to demutualize the rating agencies and the issuer companies.

Improve CRAs Image -

Many of the investors who were examined believed that CRAs do not work independently and objectively. Many felt grades were biased and not reliable. Hence, it becomes necessary for CRAs to reinstate the trust and confidence of the retail investors.

Financial Literacy and Awareness by SEBI -

Many Investors were caught unaware of the concept of IPO Grading and were not knowing the factors considered while analysing and giving grades. This illiteracy also led many investors to believe that Higher Grades can lead to better return and grades can predict the actual future performance which when analysed through secondary research proved to be wrong. Therefore, Rating Agencies, in collaboration with SEBI, should organize investor-education programs to create awareness among investors and to explain the importance of ratings in their investment because, as if the investors do not understand and make use of the rating service, then the purpose, as already mentioned, is defeated.

Grading by more than one CRA -

Many respondents were of the opinion that having more than one CRA on grading the issue would help provide a better picture of the issue. Hence, SEBI should think about bringing in the regulation maybe for large issues, so that cost can be justified.

CHAPTER 6: REFERENCES

Baker H. Kent and Mansi Sattar A. (2002), ‘Assessing Credit Rating Agencies by Bond Issuers and Institutional Investors’, Journal of Business Finance & Accounting, 29(9) & (10), 0306-686X.

Bheemanagouda and J Madegowda (2010), ‘Working of Credit Rating Agencies in India: An Analysis of Investors’ Perception’, IUP Journal of Behavioral Finance.

BT Money (2007), ‘The New IPO Code’, Syndication Today.

Chien-Ting Lin & Shou-Ming Hsu (2008): Determinants of the initial IPO performance: evidence from Hong Kong and Taiwan, Applied Financial Economics, 18:12, 955-963.

Deb S Saikat and Marisetty Vijaya B (2008), ‘Information Content of IPO Grading’, published in http://ssrn.com/abstract=1276243 retrieved on 25th Sep. 2011

Deb Soumya Guha (2009), ‘Some Insights into IPO Underpricing in India’, The XIMB Journal of Management.

Dirk Czarnitzki & Kornelius Kraft (2007): Are credit ratings valuable information?, Applied Financial Economics, 17:13, 1061-1070.

Dorn Daniel (2009), ‘Does Sentiment Drive the Retail Demand for IPOs?’, JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS Vol. 44, No. 1, pp. 85.108.

Garg Ajay, Arora Parvinder and Singla Ruchi (2008), ‘IPO Underpricing in India’, The Icfai Journal of Applied Finance, Vol. 14, No. 3.

Gupta L. C. (2007), ‘How IPO Grading can help’, The Business Line dated 14th June 2007.

Haldea Prithvi (2007), ‘My grade to IPO grading: 0’, published in Article 58, Indian Express-Express Money, 14th April, 2007.

http://www.chittorgarh.com/ipo/reports/ipo_report_yearly_parent.asp accessed on January 20, 2012

http://www.nseindia.com/products/content/equities/equities/eq_security.htm accessed on January 20, 2012

http://www.nseindia.com/products/content/equities/indices/historical_index_data.htm accessed on January 20, 2012

http://www.nseindia.com/products/content/equities/ipos/historical_ipo.htm accessed on January 20, 2012

http://www.sebi.gov.in/faq/ipograding.html accessed on December 26,2011

International Economy (2008), ‘Do the Credit Ratings Agency Deserve to Exist?’, pp.12-20.

Khurshed A, Paleari S, Pande A and Vismara S (2010), ‘IPO Grading in India: Does it Add Value to the Book Building Process?’, unpublished working paper.

Krishnamurti C, Thong Tiong Yang and Vishwanath S.R., ‘Does Certification Work in Emerging Markets? Evidence from the Indian IPO Market’ in 2009 JCF Conference on Emerging Market Corporate Finance, Beijing, China.

MINISTRY OF FINANCE (2009), ‘Report of the Committee on Comprehensive Regulation for Credit Rating Agencies’, submitted to High Level Coordination Committee on Financial Matters.

Poon Winnie P.H. and Chan Kam C. (2008), ‘The Effects of Credit Ratings on Stock Returns in China’, the Chinese Economy, vol. 41, no. 2, pp. 34–55.

Poudyal Sanjay (2008), ‘Grading Initial Public Offerings (IPOs) in India’s Capital Markets - A Globally Unique Concept’, IIMA Research and Publications, W.P. No.2008-12-08.

Shelly and Singh Balwinder (2008), ‘Oversubscription and IPO Underpricing: Evidence from India’, ICFAI Journal of Applied Finance.

The Chartered Accountant (2006), ‘SEBI’s Initiative to Safeguard Investors ‘Interest through IPO Grading’, Banking and Finance, pp. 116-122.

APPENDICES

APPENDIX 1 - Questionnaire: Mandatory IPO Grading - Effects on Investor's Perception & Investment Decision regarding IPO

Name: __________________________________________Gender: M F Age: ________ years

RESPONDENTS’ PROFILE –

What is the Annual Investment in Stock Market?

(a) 0 – 50,000 (b) 50,000 – 1 Lakh (c) 1 Lakh – 1.5 Lakh (d) More than 1.5 Lakh

What is the approx. no. of IPOs applied till date?

Less than 5 b. 5 – 15 c. 16 – 30 d. More than 30

From how many years have you been investing in Stock Market?

0 – 1 b. 1 – 3 c. 3 – 5 d. 5 – 10 e. More than 10

IPO GRADING -

Are you aware of the concept of IPO Grading? (a) Aware (b) Not Aware

Do you understand IPO grades assigned by Credit Rating Agency (CRA)?

(a) Yes (b) No

Do you consider the grades assigned by CRA before investing in IPO?

(a) Yes (b) No

Do you think the grades assigned by CRA -

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

IPO Grades reflect the Business & Competitive Position of the company

IPO Grades reflect the Financial Position and Prospects

IPO Grades reflect the

Management Quality

IPO Grades reflect the

Corporate Governance practices

IPO Grades are Reliable

IPO Grades are Free from Biases

Do you think IPO grading can predict post IPO secondary market liquidity and risk?

Yes (b) No (c) Can’t Say

If a well – known and an old company (say TATA, Reliance) comes with an IPO which is poorly graded (1/5), would you still invest?

(a)Yes (b) No (c) Can’t Say

Weight the factors influencing Investment decision as per its importance ( 5 – Most Important 1 – Least Important)

Factors

5

4

3

2

1

Own Judgment influences investment

IPO Grading influences investment

Advise of brokers/ broking house influences investment

Expert opinions influences investment

Industry prospectus influences investment

Company Background influences investment

Review of issuer-organization in print/e-media influences investment

Recommendations by family & friends influences investment

Name of the underwriters of the IPO issue influences investment

Future prospectus of the business influences investment

Brand name of the company influences investment

Management of the Organization influences investment

Past financial records if available influences investment

Economic Scenario influences investment

Promoters of the company

Should the mandatory IPO Grading system be continued in India? (a)Yes (b) No

Would you still encourage IPO Grading if its cost must be shared by you alongwith the Issuing company? (a)Yes (b) No

CREDIT RATING AGENCIES –

Rank the following CRAs as per your preferred CRA - ( 1 – Most Preferred 4 – Least Preferred)

Credit Rating Agency

Rank

ICRA

CARE

CRISIL

FITCH

What do you think of the working of Credit Rating Agency?

Works Independently & Objectively

Do not work Independently & Objectively

Can’t Say

Do you think there is a need for grading of IPO by more than one CRA?

Necessary

Not Necessary

Can’t Say

If an IPO is graded by more than one CRA, which one would you consider?

Higher Rating

Lower Rating

Rating by your preferred Credit Rating Agency

Don’t consider the rating

APPENDIX 2 - Data: IPO Grades, Issue Price, Listing Day Price, Price after 1 year, NSE on Listing Day and NSE after 1 year

Company

Grade

Issue Date

Issue Price

Retail Subscription

Listing Day Closing Price

Price After 1 Year

NSE closing on listing

NSE after 1 year

Listing Day Gains

NSE Gain Loss

Stock Gain/Loss

Relative Gain/Loss

TARAPUR TRANSFORMERS LIMITED

1

18-05-2010

75

2.74

57.40

21.15

5066.20

5420.60

-23.47

7.00

-71.80

-78.80

INFINITE COMPUTER SOLUTIONS (INDIA) LIMITED

2

03-02-2010

165

11.08

191.80

177.10

4931.85

5526.75

16.24

12.06

7.33

-4.73

SYNCOM HEALTHCARE LIMITED

2

15-02-2010

75

6.25

87.75

33.80

4801.95

5481.00

17.00

14.14

-54.93

-69.07

D B REALTY LIMITED

2

24-02-2010

468

0.37

456.20

105.35

4858.60

5262.70

-2.52

8.32

-77.49

-85.81

EMMBI POLYARNS LIMITED

2

24-02-2010

45

0.46

28.75

13.70

4858.60

5262.70

-36.11

8.32

-69.56

-77.87

ARSS INFRASTRUCTURE PROJECTS LIMITED

2

03-03-2010

450

18.55

737.45

607.85

5088.10

5536.20

63.88

8.81

35.08

26.27

TEXMO PIPES & PRODUCTS LTD

2

10-03-2010

90

7.26

137.15

34.10

5116.25

5494.40

52.39

7.39

-62.11

-69.50

PRADIP OVERSEAS LIMITED

2

05-04-2010

110

10.53

107.05

85.55

5368.40

5910.05

-2.68

10.09

-22.23

-32.32

GOENKA DIAMOND & JEWELS LIMITED

2

16-04-2010

135

0.66

127.60

64.90

5262.60

5729.10

-5.48

8.86

-51.93

-60.79

NITESH ESTATES LIMITED

2

13-05-2010

54

0.16

51.40

27.70

5178.90

5544.75

-4.81

7.06

-48.70

-55.77

PARABOLIC DRUGS LIMITED

2

01-07-2010

75

0.40

64.85

41.10

5251.40

5627.20

-13.53

7.16

-45.20

-52.36

ASTER SILICATES LIMITED

2

28-07-2010

118

7.41

205.55

23.00

5397.55

5487.75

74.19

1.67

-80.51

-82.18

PRAKASH STEELAGE LIMITED

2

25-08-2010

110

6.62

185.35

126.00

5462.35

4839.60

68.50

-11.40

14.55

25.95

MICROSEC FINANCIAL SERVICES LIMITED

2

05-10-2010

118

11.04

111.35

29.30

6145.80

4751.30

-5.64

-22.69

-75.17

-52.48

CANTABIL RETAIL INDIA LIMITED

2

12-10-2010

135

2.63

105.00

24.55

6090.90

5099.40

-22.22

-16.28

-81.81

-65.54

BEDMUTHA INDUSTRIES LTD

2

14-10-2010

102

8.51

179.15

108.75

6177.35

5132.30

75.64

-16.92

6.62

23.54

COMMERCIAL ENGINEERS & BODY BUILDERS CO LIMITED

2

18-10-2010

127

0.38

112.90

39.55

6075.95

5037.50

-11.10

-17.09

-68.86

-51.77

BS TRANSCOMM LIMITED

2

27-10-2010

248

1.04

381.25

100.90

6012.65

5360.70

53.73

-10.84

-59.31

-48.47

GYSCOAL ALLOYS LIMITED

2

27-10-2010

71

8.00

81.65

19.30

6012.65

5360.70

15.00

-10.84

-72.82

-61.97

R.P.P. INFRA PROJECTS LIMITED

2

06-12-2010

75

5.60

68.90

62.15

5992.25

5062.60

-8.13

-15.51

-17.13

-1.62

RAVI KUMAR DISTILLERIES LIMITED

2

27-12-2010

64

3.01

80.05

13.10

5998.10

4750.50

25.08

-20.80

-79.53

-58.73

JUBILANT FOODWORKS LIMITED

3

08-02-2010

145

3.79

229.10

493.85

4760.40

5312.55

58.00

11.60

240.59

228.99

VASCON ENGINEERS LIMITED

3

15-02-2010

165

0.62

148.05

102.70

4801.95

5481.00

-10.27

14.14

-37.76

-51.90

THANGAMAYIL JEWELLERY LIMITED

3

19-02-2010

75

2.26

71.05

163.35

4844.90

5518.60

-5.27

13.91

117.80

103.89

AQUA LOGISTICS LTD

3

23-02-2010

220

3.00

244.60

183.50

4870.05

5437.35

11.18

11.65

-16.59

-28.24

HATHWAY CABLE & DATACOM LIMITED

3

25-02-2010

240

0.28

207.65

120.10

4859.75

5303.55

-13.48

9.13

-49.96

-59.09

MAN INFRACONSTRUCTION LIMITED

3

11-03-2010

252

10.26

349.85

142.90

5133.40

5445.45

38.83

6.08

-43.29

-49.37

UNITED BANK OF INDIA

3

18-03-2010

66

9.80

68.65

102.45

5245.90

5373.70

4.02

2.44

55.23

52.79

PERSISTENT SYSTEMS LIMITED

3

06-04-2010

310

21.69

406.35

406.65

5366.00

5891.75

31.08

9.80

31.18

21.38

TALWALKARS BETTER VALUE FITNESS LIMITED

3

10-05-2010

128

8.43

163.15

220.40

5193.60

5541.25

27.46

6.69

72.19

65.49

MANDHANA INDUSTRIES LIMITED

3

19-05-2010

130

2.81

133.55

180.05

4919.65

5428.10

2.73

10.34

38.50

28.16

JAYPEE INFRATECH LIMITED

3

21-05-2010

102

0.61

91.45

51.55

4931.15

5386.55

-10.34

9.24

-49.46

-58.70

TECHNOFAB ENGINEERING LIMITED

3

16-07-2010

240

10.03

296.95

131.35

5393.90

5567.05

23.73

3.21

-45.27

-48.48

INDOSOLAR LIMITED

3

29-09-2010

29

1.81

23.70

9.05

5991.30

5015.45

-18.28

-16.29

-68.79

-52.51

ELECTROSTEEL STEELS LIMITED

3

08-10-2010

11

6.19

11.25

5.95

6103.45

4979.60

2.27

-18.41

-45.91

-27.50

RAMKY INFRASTRUCTURE LIMITED

3

08-10-2010

450

0.99

387.40

206.75

6103.45

4979.60

-13.91

-18.41

-54.06

-35.64

PRESTIGE ESTATES PROJECTS LIMITED

3

27-10-2010

183

0.08

193.15

98.50

6012.65

5360.70

5.55

-10.84

-46.17

-35.33

GRAVITA INDIA LIMITED

3

16-11-2010

125

37.34

209.70

442.05

5988.70

5030.45

67.76

-16.00

253.64

269.64

CAREER POINT INFOSYSTEMS LIMITED

3

06-10-2010

310

31.74

628.15

248.45

6186.45

4888.05

102.63

-20.99

-19.85

1.13

IL&FS TRANSPORTATION NETWORKS LIMITED

4

30-03-2010

258

4.56

274.65

238.45

5262.45

5787.65

6.45

9.98

-7.58

-17.56

SHREE GANESH JEWELLERY HOUSE LIMITED

4

09-04-2010

260

1.39

164.55

164.15

5361.75

5785.70

-36.71

7.91

-36.87

-44.77

INTRASOFT TECHNOLOGIES LIMITED

4

12-04-2010

145

13.51

159.10

71.75

5339.70

5911.50

9.72

10.71

-50.52

-61.23

SJVN LIMITED

4

20-05-2010

26

3.12

25.10

21.30

4947.60

5486.35

-3.46

10.89

-18.08

-28.97

HINDUSTAN MEDIA VENTURES LIMITED

4

21-07-2010

166

1.00

188.95

133.25

5399.35

5541.60

13.83

2.63

-19.73

-22.36

SKS MICROFINANCE LIMITED

4

16-08-2010

985

2.81

1088.65

317.70

5418.30

5035.80

10.52

-7.06

-67.75

-60.69

BAJAJ CORP LIMITED

4

18-08-2010

660

6.62

758.75

109.05

5479.15

4944.15

14.96

-9.76

-83.48

-73.71

GUJARAT PIPAVAV PORT LIMITED

4

09-09-2010

46

9.15

54.05

66.05

5640.05

5059.45

17.50

-10.29

43.59

53.88

EROS INTERNATIONAL MEDIA LIMITED

4

06-10-2010

175

11.95

190.25

235.35

6186.45

4888.05

8.71

-20.99

34.49

55.47

ORIENT GREEN POWER COMPANY LIMITED

4

08-10-2010

47

0.18

44.70

15.25

6103.45

4979.60

-4.89

-18.41

-67.55

-49.14

TECPRO SYSTEMS LIMITED

4

12-10-2010

355

9.07

405.70

215.10

6090.90

5099.40

14.28

-16.28

-39.41

-23.13

VA TECH WABAGH LIMITED

4

13-10-2010

1310

8.55

1707.95

917.00

6233.90

5077.85

30.38

-18.54

-30.00

-11.46

ASHOKA BUILDCON LIMITED

4

14-10-2010

324

3.46

330.75

239.65

6177.35

5132.30

2.08

-16.92

-26.03

-9.12

OBEROI REALTY LIMITED

4

20-10-2010

260

0.94

282.90

234.20

5982.10

5091.90

8.81

-14.88

-9.92

4.96

PUNJAB & SIND BANK

4

30-12-2010

120

44.45

127.15

60.20

6101.85

4624.30

5.96

-24.21

-49.83

-25.62

COAL INDIA LIMITED

5

04-11-2010

245

2.31

342.55

326.30

6281.80

5284.20

39.82

-15.88

33.18

49.06

MOIL LIMITED

5

15-12-2010

375

32.86

465.05

226.05

5892.30

4746.35

24.01

-19.45

-39.72

-20.27