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IMPACT OF LISTING ON FINANCIAL PERFORMANCE OF VENTURE CAPITAL-BACKED COMPANIES: A CASE STUDY OF PRATAAP SNACKS LIMITED, MADHYA PRADESH

 

Authors:

Addanki Anil Kumar, Dr. Mamilla Rajasekhar

Abstract:

           The Indian stock market has become increasingly visible in recent years, stimulating the interest of shareholders in participating in publicly traded companies. The practice of listing has been extensively studied in recent years. Multiple analyses have been done to determine the value of listed companies across sectors on major stock markets. Research into the benefits of stock exchange listing and depictions of how listed companies perform operationally have yielded conflicting findings thus far. This study focuses on the impact of listing on the financial performance of venture capital-backed companies. This study analyses the fluctuations of Prataap Snacks Limited, a venture capital-backed firm that debuted on the National Stock Exchange on October 5, 2017. The goal of the study is to forecast and evaluate variables and outcomes that could affect Prataap Snacks Limited's listing. This study relies solely on secondary data collected from the annual reports of Prataap Snacks Limited for 10 years, starting from FY 2012–13 to FY 2021–2022. The collected data is dispersed up to +5 or -5 years from the date of listing. The factors used in the current study are profitability, liquidity, solvency, operational efficiency, and asset utilization capacity. The significance of the difference between the two variables was tested using a paired sample t-test, and the hypotheses were tested based on the means of the two variables. There appears to be a perplexing change in financial performance between pre- and post-listing, suggesting that variables respond differently to the listing event. The profitability and asset utilization capacity of Prataap Snacks Limited is shown to be unaffected by listing, whereas the firm's solvency and liquidity are significantly affected.

Keywords: Venture capital-backed IPO, Listing, Profitability, Financial functioning

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