Stock Market Efficiency Around Private Placement Announcements in India
International Journal of Research in Management and Social Science, ISSN 2322-0899, Vol 5(2), April-June 2017
14 Pages Posted: 21 Jun 2017
Date Written: June 20, 2017
This study examines the stock price reactions around private placements announcement in India. The sample consists of information technology and infrastructure sector from India. Event study methodology is used to analyze the announcement impact of private placements. Results suggest that Information technology firms on an average, yield positive average abnormal returns around private placement announcement. During the announcement window (one day before and after the announcement), firms reflect negative abnormal return. The study supports signaling hypothesis and concludes that Indian stock market is semi-strong form efficient as the news induced in the stock market is reflected in the stock prices. These results are consistent with studies conducted in United States, Sweden, Canada, and New Zealand.
Keywords: Private Placement, Announcement of Issue
JEL Classification: G32
Suggested Citation: Suggested Citation