BFSI sector in India: A study of the post offering performance of IPO
Dr. Amit Kumar Singh, Dr. Arun Kumar Attree and Shubham Singhania
With the advent of the growing financial markets as well as the growth of the BFSI (Banking, Financial services, Insurance) sector owing to wide spread Digitization in the Indian economy, the BFSI sector has become the major sector for raising funds from the Public. The recommendations of the expert committees on the BFSI sector encouraged the BFSI firms to raise funds from the capital market through IPOs, due to the increase in the role of online services such as credit score analysis, fraud detection, automation of loan etc. Out of the seven IPOs in Indian markets in 2018-19, three have been from the BFSI sector including the vastly-oversubscribed IPO of HDFC Asset Management Co. Ltd. The other two BFSI deals were those of Indo Star Capital Finance Ltd and Credit Access Grameen Ltd. This paper concentrates on IPOs from the BFSI sector from the period 2012-2016. In a developing country, the role of the BFSI sector for economic development is undisputed. In view of its importance in economic resource allocation and empirical evidences of IPO underperformance in the developing countries in the background, this paper analyses the BFSI sector IPOs in detail. The IPOs’ pre and post listing performances have been evaluated based on certain accounting measures that impact operating performance. As per the results, the key accounting parameters showed improvement in the performance of the BFSI in the post listing period.