The phenomenon of underpricing of initial public offerings has become ubiquitous feature of markets, the globe over, despite the differences in regulatory environment, the state of economy, issuing mechanisms and therefore the sort of investors involved. Numerous studies have documented the presence of initial abnormal returns or underpricing of initial public offerings and its possible determinants, yet the search continues to be on, what determines underpricing? It therefore becomes desirable to understand on why most of empirical investigation seems insufficient to demystify this anomaly. It’s the peculiarities of Indian IPO market, which give strong justification for present endeavour. One, the various pricing regimes that Indian IPO market has undergone, vouch for studying the pricing performance of recent issues. Two, the presence of scores of retail individual investors on the Indian IPO market scene not to mention less developed infrastructure provide strong breeding ground for informational issues and therefore the resultant underpricing. ‘Asymmetric information is the core problem underlying IPO underpricing. India's IPO market is exclusive by world standards for the institutions and human capital which enable the marketing of IPOs to a lot of lay investors everywhere the country. From the point of view of IPO underpricing, however, such an IPO market may be a very poor one, because it emphasizes reaching bent on uninformed investors in up to now as these uninformed investors cannot discriminate between "good" and "bad" IPOs, the "good" IPOs must strongly underprice themselves so as to remain attractive’. No doubt, the pioneering process of IPO grading has been recently put in situation for helping the reason for retail individual investors but the concept is new and it offers no comments on pricing issues. It doesn't offer any investment recommendation though it's hoped to be evolved into valuation exercise, over time. Nevertheless, it'd be desirable to research the impact of IPO grading on pricing performance of recent issues and it's also rendered desirable to research underpricing of IPOs.

KEYWORDS: Initial Public Offer, Market Phenomena, Statutory Requirements, Underpricing, Valuation.