Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidel... more Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidelines, which has to be followed by the issuer in context of prospectus document. These guidelines were formulated by Securities Exchange Board of India (SEBI) to make the firm specific information equally available to different groups of investors and to minimize the information asymmetry. Information asymmetry contributes to ex-ante uncertainty. Ex-ante uncertainty around equity issue spurs underpricing. The objective of the study was to examine the impact of firm specific characteristics on underpricing. Out of various proxies of ex-ante uncertainty; age of firm, turnover, pre IPO leverage; share held by promoters recognised as firm specific characteristics with reference to objective of the study. Initial public offers that were floated from 2007 to 2012 sampled for the purpose of the study. Using multiple regression techniques it was found that age of firm, pre IPO leverage, turnover ...
International Journal of Business Management & Research, 2017
Boom and slump also occurs in Initial public offer segment of corporate securities market. Studie... more Boom and slump also occurs in Initial public offer segment of corporate securities market. Studies in context of developed capital market have exhibited that the macroeconomic variables, as well as market specific variables cause fluctuation in size and number of initial public offers (IPOs). This study, examines the relation between the financial market conditions (i.e. interest rate), total economy activity (GDP) and the IPO activity. Data from Jan 2004 to 2016 on quarterly basis was sampled for the purpose of the analysis. Co-integration and Granger Causality tests performed on variables namely number of IPO issue, issue size, interest rate and GDP. It was found that the interest rate has cointegration, but do not have causal relationship with number of IPO issues, as well as with size of IPO. GDP showed a significant causal relation with issue size, but insignificant one with the number of issue. Our findings contradict with the findings of Kaya (2013) and Lowery (2004). Finally, it is concluded that only GDP has a causal relationship with the size of IPO.
Boom and slump also occurs in Initial public offer segment of corporate securities market. Studie... more Boom and slump also occurs in Initial public offer segment of corporate securities market. Studies in context of developed capital market have exhibited that the macroeconomic variables, as well as market specific variables cause fluctuation in size and number of initial public offers (IPOs). This study, examines the relation between the financial market conditions (i.e. interest rate), total economy activity (GDP) and the IPO activity. Data from Jan 2004 to 2016 on quarterly basis was sampled for the purpose of the analysis. Co-integration and Granger Causality tests performed on variables namely number of IPO issue, issue size, interest rate and GDP. It was found that the interest rate has co-integration, but do not have causal relationship with number of IPO issues, as well as with size of IPO. GDP showed a significant causal relation with issue size, but insignificant one with the number of issue. Our findings contradict with the findings of Kaya (2013) and Lowery (2004). Finally, it is concluded that only GDP has a causal relationship with the size of IPO.
The literature on growth and development of initial public offers in India is limited and somewha... more The literature on growth and development of initial public offers in India is limited and somewhat dated. The present paper is an attempt to document the trend and recent market reforms undertaken SEBI to improve the initial public offer segment of corporate securities market. We observed that all these changes were introduced to make healthy philanthropic process. The relevant credentials of pertinent act as well recent reform substantiates it very well. It complements the extant literature by presenting recent reforms in systematic manner. Applying simple ststistical tools on a sampled data(2001-02 to 2012-13), it is noticed that the initial public offer segment of new issue market in india have two consecutive boom and slump phases since 2001-02 to 2012-13 and major reforms came after trough phase or in expansory phase of the market and made the new issue market to reach at peak. It was noticed that there when there was a down fall in initial public offers, the bond market showed an upward moment. It is concluded that reforms in initial public offers segment of corporate securities market has made the segment to perform well and revived it from slump phase.
Indian corporate securities market primary as well as secondary has grown in terms of financial p... more Indian corporate securities market primary as well as secondary has grown in terms of financial products and volume of trading. A wide range of the financial products made regulators to bring several changes in the existing procedures. In the last decade several changes have been introduced by the Securities Exchange Board of India in the process of making initial public offers. The company act 1956 and 2013, Securities Contract (Regulation) Act 1956 and the Securities Exchange board of India induced several changes in context of eligibility requirement, process simplification, existing definition of products and parties. We observed that all these changes were introduced to make healthy philanthropic process. The relevant credentials of pertinent act as well recent reform substantiates it very well. It complements the extant literature by presenting recent reforms in systematic manner.
Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidel... more Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidelines, which has to be followed by the issuer in context of prospectus document. These guidelines were formulated by Securities Exchange Board of India (SEBI) to make the firm specific information equally available to different groups of investors and to minimize the information asymmetry. Information asymmetry contributes to ex-ante uncertainty. Ex-ante uncertainty around equity issue spurs underpricing. The objective of the study was to examine the impact of firm specific characteristics on underpricing. Out of various proxies of ex-ante uncertainty; age of firm, turnover, pre IPO leverage; share held by promoters recognised as firm specific characteristics with reference to objective of the study. Initial public offers that were floated from 2007 to 2012 sampled for the purpose of the study. Using multiple regression techniques it was found that age of firm, pre IPO leverage, turnover as well as fraction of share held by the promoter's of private sector firms in India do not have any statistically significant impact on the level of undepricing. Findings of the present study are quite contradictory to the findings of Ritter (1984), however similar to the findings emerged from the studies Jain & Padamavati, 2012) that have already been conducted in Indian context. It is concluded that, although firm specific characteristic have correlation with initial day return but firm specific characteristics, do not cause any statistical significant impact on underpricing. On the other hand statistical findings of the present study, have justified the initiative and efforts of SEBI in minimization of information asymmetry at the public issue of equity instruments.
Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidel... more Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidelines, which has to be followed by the issuer in context of prospectus document. These guidelines were formulated by Securities Exchange Board of India (SEBI) to make the firm specific information equally available to different groups of investors and to minimize the information asymmetry. Information asymmetry contributes to ex-ante uncertainty. Ex-ante uncertainty around equity issue spurs underpricing. The objective of the study was to examine the impact of firm specific characteristics on underpricing. Out of various proxies of ex-ante uncertainty; age of firm, turnover, pre IPO leverage; share held by promoters recognised as firm specific characteristics with reference to objective of the study. Initial public offers that were floated from 2007 to 2012 sampled for the purpose of the study. Using multiple regression techniques it was found that age of firm, pre IPO leverage, turnover ...
International Journal of Business Management & Research, 2017
Boom and slump also occurs in Initial public offer segment of corporate securities market. Studie... more Boom and slump also occurs in Initial public offer segment of corporate securities market. Studies in context of developed capital market have exhibited that the macroeconomic variables, as well as market specific variables cause fluctuation in size and number of initial public offers (IPOs). This study, examines the relation between the financial market conditions (i.e. interest rate), total economy activity (GDP) and the IPO activity. Data from Jan 2004 to 2016 on quarterly basis was sampled for the purpose of the analysis. Co-integration and Granger Causality tests performed on variables namely number of IPO issue, issue size, interest rate and GDP. It was found that the interest rate has cointegration, but do not have causal relationship with number of IPO issues, as well as with size of IPO. GDP showed a significant causal relation with issue size, but insignificant one with the number of issue. Our findings contradict with the findings of Kaya (2013) and Lowery (2004). Finally, it is concluded that only GDP has a causal relationship with the size of IPO.
Boom and slump also occurs in Initial public offer segment of corporate securities market. Studie... more Boom and slump also occurs in Initial public offer segment of corporate securities market. Studies in context of developed capital market have exhibited that the macroeconomic variables, as well as market specific variables cause fluctuation in size and number of initial public offers (IPOs). This study, examines the relation between the financial market conditions (i.e. interest rate), total economy activity (GDP) and the IPO activity. Data from Jan 2004 to 2016 on quarterly basis was sampled for the purpose of the analysis. Co-integration and Granger Causality tests performed on variables namely number of IPO issue, issue size, interest rate and GDP. It was found that the interest rate has co-integration, but do not have causal relationship with number of IPO issues, as well as with size of IPO. GDP showed a significant causal relation with issue size, but insignificant one with the number of issue. Our findings contradict with the findings of Kaya (2013) and Lowery (2004). Finally, it is concluded that only GDP has a causal relationship with the size of IPO.
The literature on growth and development of initial public offers in India is limited and somewha... more The literature on growth and development of initial public offers in India is limited and somewhat dated. The present paper is an attempt to document the trend and recent market reforms undertaken SEBI to improve the initial public offer segment of corporate securities market. We observed that all these changes were introduced to make healthy philanthropic process. The relevant credentials of pertinent act as well recent reform substantiates it very well. It complements the extant literature by presenting recent reforms in systematic manner. Applying simple ststistical tools on a sampled data(2001-02 to 2012-13), it is noticed that the initial public offer segment of new issue market in india have two consecutive boom and slump phases since 2001-02 to 2012-13 and major reforms came after trough phase or in expansory phase of the market and made the new issue market to reach at peak. It was noticed that there when there was a down fall in initial public offers, the bond market showed an upward moment. It is concluded that reforms in initial public offers segment of corporate securities market has made the segment to perform well and revived it from slump phase.
Indian corporate securities market primary as well as secondary has grown in terms of financial p... more Indian corporate securities market primary as well as secondary has grown in terms of financial products and volume of trading. A wide range of the financial products made regulators to bring several changes in the existing procedures. In the last decade several changes have been introduced by the Securities Exchange Board of India in the process of making initial public offers. The company act 1956 and 2013, Securities Contract (Regulation) Act 1956 and the Securities Exchange board of India induced several changes in context of eligibility requirement, process simplification, existing definition of products and parties. We observed that all these changes were introduced to make healthy philanthropic process. The relevant credentials of pertinent act as well recent reform substantiates it very well. It complements the extant literature by presenting recent reforms in systematic manner.
Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidel... more Importance of prospectus cannot be ignored in any public issue. In India there is a set of guidelines, which has to be followed by the issuer in context of prospectus document. These guidelines were formulated by Securities Exchange Board of India (SEBI) to make the firm specific information equally available to different groups of investors and to minimize the information asymmetry. Information asymmetry contributes to ex-ante uncertainty. Ex-ante uncertainty around equity issue spurs underpricing. The objective of the study was to examine the impact of firm specific characteristics on underpricing. Out of various proxies of ex-ante uncertainty; age of firm, turnover, pre IPO leverage; share held by promoters recognised as firm specific characteristics with reference to objective of the study. Initial public offers that were floated from 2007 to 2012 sampled for the purpose of the study. Using multiple regression techniques it was found that age of firm, pre IPO leverage, turnover as well as fraction of share held by the promoter's of private sector firms in India do not have any statistically significant impact on the level of undepricing. Findings of the present study are quite contradictory to the findings of Ritter (1984), however similar to the findings emerged from the studies Jain & Padamavati, 2012) that have already been conducted in Indian context. It is concluded that, although firm specific characteristic have correlation with initial day return but firm specific characteristics, do not cause any statistical significant impact on underpricing. On the other hand statistical findings of the present study, have justified the initiative and efforts of SEBI in minimization of information asymmetry at the public issue of equity instruments.
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