This paper attempts to design and test empirical
models, which integrate theoretical, institutional, and other factors, which
interact to explain ownership structure. Ex-ante information at the level of
underpricing succeeds the Indian stock market crunch. The study is based on IPO
that listed at Bombay stock exchange given that April 2000 to December 2011.
Multiple linear regressions are used to distinguish the relationship between
various independent variables with the dependent variable, i.e. level of
underpricing. The outcomes of multiple regressions reveal that, firm’s age, IPO
years, book building pricing mechanism, ownership structure, issue size, &
market capitalization explained 44% of the variation in issuer underpricing,
Durbin Watson’s value subsisted 1.58, which indicates that, there is a positive
sequential relationship between variables. Number of share offered, issue size,
market capitalization, subscription offer timing, book building mechanism and
IPO years 2006, 2009 & 2011 are constructed to have important effect on the
level of underpricing after the Indian market crisis. Nevertheless, firm’s age,
IPOs year 2008, private issuing firms, non institutional promoters, Indian
promoters and non institutional non promoters contain no significant difference
in the level of underpricing after-market crisis.
Article by Rohit
Bansal and Ashu Khanna,from Institute of Technology, Roorkee Uttrakhand, India
Full access: http://mrw.so/jHZzF
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