IPOs are the focus o f attention fo r many investors, analysts and researchers as they have the potential to provide huge abnormal returns on the first day o f listing. Various reasons have been assigned fo r the initial returns generated by IPOs. The ownership structure o f the companies going public fo r both pre and post the listing o f the IPO stocks, and more specifically ownership retention by promoters and promoter groups, may have an impact on liquidity o f the stocks and hence the initial returns. This paper empirically investigates the effect that the retention o f ownership by promoters and promoter groups on the Market-Adjusted Initial Return (MAIR) from IPOs based on a sample o f 95 IPOs issued in India and listed on National Stock Exchange (NSE) from 2010 to 2013. The findings show that the IPOs with higher ownership retention provide significantly higher MAIR.