Listing gains

The return between the offer price and the first traded price. A share issued at ₹950 opening at ₹1,070 delivers a 12.6% listing gain.

Systematic underpricing of public offers is one of the most durable findings in finance and it exists across markets. Sellers accept it in exchange for a fully subscribed issue and a supportive aftermarket.

For an applicant, the expected value of chasing listing gains is heavily reduced by allotment odds in an oversubscribed issue, which is where most of the interesting offers sit.

The long-run record of these shares is a separate and much less flattering statistic.