International Journal of Management, IT & Engineering Vol. 8, Issue 12(1), December- 2018, ISSN: 2249-0558 Impact Factor: 7.119 Journal Homepage: http://www.ijmra.us, Email: editorijmie@gmail.com Double-Blind Peer Reviewed Refereed Open Access International Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gate as well as in Cabell’s Directories of Publishing Opportunities, U.S.A 444 International journal of Management, IT and Engineering http://www.ijmra.us, Email: editorijmie@gmail.com UNDERPRICING OF BOOK-BUILT EQUITY INITIAL PUBLIC OFFERINGS IN INDIA *Akshay Dhuria **Dr. Vinod Kumar ABSTRACT The study examines the level of underpricing of book built equity initial public offerings in India offered through Bombay Stock Exchange from 1 st April, 1999 to 31 st March, 2018. Price behaviour (level of underpricing) has been evaluated with the help of average market adjusted abnormal return (Avg. MAAR). The study is based on a sample of 406 companies which launched their IPOs through book building pricing mechanism during the study period. It is concluded that during the study period book built IPOs in the Indian market remained underpriced. The level of underpricing has been observed 17.32 % during the study period. The results of the study are in line with previous studies conducted by Kumar (2003), Singh (2003), and Kumar Vinod (2013) etc. INTRODUCTION A business organization requires long term finance for its establishment and expansion. The long term finance can be raised from primary market through the issue of equity shares, preference shares, bonds etc. Of all these instruments equity shares are most prominent. Which is evident from the fact that out of total Rs. 1,10,269 crore raised during 2017-18, Rs. 1,05,097 crore were raised through equity issues whereas Rs. 5,173 crore were raised through debt issues(SEBI Annual Report 2017-18). When company offers equity shares to public in open market for the first time, this is known as Initial Public Offering. According to SEBI annual report share of IPOs out of the four modes of resource mobilisation -- IPOs, FPOs, bonds and rights issues has gone up significantly from just 2.2 per cent in 2013-14 to 75.9 per cent in 2017-18. Similar trend is also observed for SME Platform. During the year 2017-18, an amount of Rs. 2,250 crore through 156 issues was raised through SME platform which is 1.6 times of the funds raised in 2016-17. The company may offer its shares to the public either at fixed price or it may offer a price range. If the shares are offered at fixed price, then the issue is known as fixed price issue. If a share are offered at a price range and investors are asked to make bids to determine the price of shares, then such issue is known as book-built issue. As suggested by various studies IPOs are generally underpriced. The study is an attempt to measure the level of underpricing of book built equity IPOs offered through Bombay Stock Exchange during the period from 1 st April, 1999 to 31 st March, 2018. REVIEW OF LITERATURE: Krishanmurti and Kumar (2002) conducted a study on 386 IPOs to measure the initial listing performance of Indian IPOs. Results showed that for overall sample the market adjusted return using Sensex as proxy was 72.34 per cent. Singh & Singh, Mittal (2003) studied 500 IPOs floated between years 1992-1996. It was found that an average underpricing was 83.22 per cent. The market adjusted underpricing was 75.16 per cent. The study reported that par issues were more underpriced than premium issues. Jankiramanan, S (2007) conducted a study on 116 IPOs issued during the period 2000-01. The study found under- pricing in Indian Market.. Shelly, Singh (2008) reported that the market adjusted initial return (MAIR), reputation of lead manager and age of the company have significant impact on level of subscription. *Assistant Professor, Budha Group of Institutions, Ramba (Karnal) **PGT Commerce, HES-II, DSE, Haryana