Underpricing in Graded IPOs

International Doctoral Convention (ISBN: 978-81-910118-6-9), pp. 497-505, February 20-22, 2013 at Sinhgad Institute of Management, Pune.

16 Pages Posted: 4 Mar 2014

See all articles by Sudesh Kumar Sharma

Sudesh Kumar Sharma

Sinhgad Institute of Management & Computer Application; Sinhgad Institute of Management

Sanjiv Mittal

Guru Gobind Singh Indraprastha (GGSIP) University - University School of Management Studies

Naresh Gupta

University of Delhi

Date Written: March 4, 2014

Abstract

SEBI, the Indian securities market regulator has set a unique example for the entire world by introducing IPO grading in India. The purpose of this grading was to provide retail investors with a ready-made assessment of the fundamental quality of the issuer of an IPO, so they could make a better and informed investment decision in an era of information overload. Grading of IPOs is subject to severe criticism. Critics question efficacy and effect of this process. Based on the study of 319 IPOs, inclusive of 97 graded IPOs, findings of this paper suggest that IPO grading do have fairly strong negative effect on underpricing.

Keywords: IPOs, IPO Grading, underpricing, retail investors

JEL Classification: G11, G14, G15, G18, G32

Suggested Citation

Sharma, Dr. Sudesh Kumar and Mittal, Sanjiv and Gupta, Naresh, Underpricing in Graded IPOs (March 4, 2014). International Doctoral Convention (ISBN: 978-81-910118-6-9), pp. 497-505, February 20-22, 2013 at Sinhgad Institute of Management, Pune. , Available at SSRN: https://ssrn.com/abstract=2404213 or http://dx.doi.org/10.2139/ssrn.2404213

Dr. Sudesh Kumar Sharma (Contact Author)

Sinhgad Institute of Management & Computer Application ( email )

Sinhgad Narhe Technical Campus, Narhe-Dhayari Road
Ambegaon Budruk
Pune, Maharashtra, Maharashtra 411041
India
9960290601 (Phone)

Sinhgad Institute of Management ( email )

Pune, Maharashtra 411041
India

Sanjiv Mittal

Guru Gobind Singh Indraprastha (GGSIP) University - University School of Management Studies ( email )

New Delhi, 110065
India

Naresh Gupta

University of Delhi ( email )

India

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