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Finance Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26384
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| Title: | Group Affiliation and the Performance of Initial Public Offerings in the
Indian Stock Market |
| Authors: | Subrahmanyam, Marti G
Marisetty, Vijaya B |
| Keywords: | Initial Public Offering (IPO)
Underpricing
Business Groups
Certification |
| Issue Date: | Sep-2006 |
| Series/Report no.: | FIN-06-026 |
| Abstract: | We document the effects of group affiliation on the initial performance
of the 2,713 Initial Public Offerings (IPOs) in India under three
regulatory regimes during the period 1990-2004. We distinguish between
two competing hypotheses regarding group affiliation and a firm’s
initial stock market performance: the certification hypothesis and the
“tunneling” hypothesis. We show that the underpricing of
group companies is higher than that of stand-alone companies, lending
support to the tunneling hypothesis. However, on an ex post basis, we
find that group-affiliated companies have a higher probability of
survival than their stand-alone counterparts: groups appear to support
their affiliates to maintain their reputation. |
| URI: | http://hdl.handle.net/2451/26384 |
| Appears in Collections: | Finance Working Papers
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