Trends and Determinants of Primary Market Activities: Evidences from India

The objective of the present study is to examine the trends and determinants of the level of primary market activities in India. Based on a sample of 23 years of data from 1997-2020, the descriptive statistics show that the private sector dominates the public sector in India. And banking, finance, IT, textile, cement and construction, telecommunication, and power are amongst the most active industries in the primary market. Semi-log regression results support the market timing hypothesis. Investor sentiment and level of market valuation affect the decisions to go public, however during high market valuation the firms are less bothered by the prevailing market volatility. Further, the fund mobilization through IPOs is significantly higher for the period of high market valuation. In cases of seasoned or follow-on public offering and right issues, prevailing market conditions are reported to have an insignificant effect. It appears that decisions to raise funds through seasoned public offering and right issues are largely affected by unique business opportunities and management consensus.