Initial public offerings have been one of the most puzzling and intriguing areas for financial research. This paper is an attempt to review the literature that explains some of the puzzling patterns with IPOs. The paper starts with the conceptual framework which describes the widely documented anomalies in the IPO market, namely: initial underpricing, the “hot issue market” phenomenon and long-run underperformance of IPOs. These anomalies are inconsistent with the efficient market hypothesis. Short-run underpricing of IPOs is an international phenomenon and in this paper we have examined the issues relating to short run underpricing of IPOs.