The role investors sentiments in stock market: the investors are behaved exuberantly or under-reacted rather than behaved rationally. It is observed in the stock market that on the listing day, the IPOs have positive returns and after a month of listing, the IPOs fall down and indulge in the declining stage. The positive return of the IPO means the investors are earned more profits from their investments and this stage is referred as overperformance of IPO. But, the pre IPO market gives the option to the investors to speculate on new come up issues rather than herding. The investors behaved exuberantly when the price of the IPOs is more from the issue price of IPO. On the Initial day of IPO, sometimes the investors behaver over optimistically or invested blindly which results in a wrong decision in future. The overly exuberant investors are ready to pay too much on the high listing price of the IPO. This means high demand of investors for that IPO shares. this behavior temporarily pushed the IPO price more than the issue price and inbestors earned positive returns but followed by the negative returns or crashed recorded after some time in that IPO. It is suggested to the investors try to behave rationally and make right investment decision after the careful analysis of IPO company fundamentals which discloses from IPO grading, company fundamentals, choose their preferences of better performed sectors which provide better returns consistently.