Political Cycle and IPO Waves: Evidence from India

Abstract

IPO activity results from good economic conditions complimented by a stable and less
precarious political scenario. As the market gains confidence, investment flows in, and the
increase in possible return attracts more IPOs. This paper investigates the possibility of the
existence of IPO wave in tandem with the political hot and cold scenario for the Indian context.
The study uses various economic, financial, and political constructs for modeling and to study
the presence of IPO market anomalies owing to political attributes. Unlike some other
developed nations, the findings negate the influence of any political wave on India's IPO
market, considering a distinct integration of the Indian election structure, which is significantly
different from the rest.

Keywords: Political cycle, IPO cycle, Swing states, Elections, Stock Market

JEL Classification: G100, G120, E70, P00