Underpricing of infrastructure of IPOs: evidence from India

Ritchie, Michael, Dimovski, William and Deb, Saikat Sovan 2013, Underpricing of infrastructure of IPOs: evidence from India, Journal of property research, vol. 30, no. 1, pp. 24-46, doi: 10.1080/09599916.2012.731076.

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Title Underpricing of infrastructure of IPOs: evidence from India
Author(s) Ritchie, Michael
Dimovski, WilliamORCID iD for Dimovski, William orcid.org/0000-0002-0038-8848
Deb, Saikat SovanORCID iD for Deb, Saikat Sovan orcid.org/0000-0002-3875-5666
Journal name Journal of property research
Volume number 30
Issue number 1
Start page 24
End page 46
Total pages 23
Publisher Routledge
Place of publication Oxon, Eng.
Publication date 2013
ISSN 0959-9916
Keyword(s) infrastructure
money left on the table
Summary This paper explores the underpricing of initial public offerings (IPOs) made by infrastructure companies in India from 2004 to 2010, and follows Dimovski who reported that in the Australian market, infrastructure IPOs did not produce underpricing returns that were statistically significantly different to zero. The objective of this paper is to investigate the underpricing of infrastructure IPOs in the emerging market of India and to explore factors that may influence the underpricing of infrastructure IPOs in India. The results show that, on average, the underpricing returns were 25.4% and statistically significantly different to zero, while money left on the table, in aggregate is not. In contrast to Australian evidence, significant underpricing in Indian infrastructure IPOs indicates greater risk of these investments. We find that oversubscription, government ownership and issue size are significant variables in explaining underpricing in Indian infrastructure IPOs.
Language eng
DOI 10.1080/09599916.2012.731076
Field of Research 150299 Banking, Finance and Investment not elsewhere classified
Socio Economic Objective 900101 Finance Services
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2013, Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30051829

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