Published Online:January 2026
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP070126
DOI:10.71329/IUPJARAP/2026.25.1.127-147
Author Name:Swathi Velisala and Kanukuntla Shankaraiah
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:127-147
The paper assesses the impact of pre-IPO operating performance on the subscription rate (SR) of small and medium enterprises (SMEs) listed on Bombay Stock Exchange (BSE) in India. A multiple regression model was developed to analyze the impact of operating performance on subscription rate of book-built SME IPOs. The study is based on secondary data collected from various sources during the period 2013-14 to 2021-22. Using multiple regression model, the study found that measures of operating performance have no impact on the SR of IPOs. As the relationships are insignificant, the study concludes that the selected metrics, barring assets turnover ratio (ATR), have their due consideration in making subscription decision, and further infers that the demand for equity shares in companies may be influenced by operating results and reputation. The study suggests that market conditions, investor sentiment, and external economic factors may play a more significant role in influencing subscription rates than previously thought.
The subscription rate (SR) of an IPO may be considered an indicator of the success or failure of the IPO, where the SR may be generally influenced by the firm’s operating performance, as the prospective investors consider it prominently while making an investment decision (Rahman et al., 2017).