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Rights issues and creeping acquisitions in India

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  • Jetley, Gaurav
  • Mondal, Shamim S.

Abstract

We analyze the extent to which promoters of firms listed on the Bombay Stock Exchange are using rights issues to circumvent regulatory provisions related to creeping acquisitions. We find that promoters use rights issues that do not have specific objectives for purposes of realizing an increase in their shareholdings. We find that a rights issue often follows a year in which the promoter has realized a loss of shareholdings. The results are especially true for firms belonging to a business group.

Suggested Citation

  • Jetley, Gaurav & Mondal, Shamim S., 2015. "Rights issues and creeping acquisitions in India," Emerging Markets Review, Elsevier, vol. 23(C), pages 68-95.
    • Handle: RePEc:eee:ememar:v:23:y:2015:i:c:p:68-95
    DOI: 10.1016/j.ememar.2015.04.005
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    Cited by:

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    3. Bipin Sony & Saumitra Bhadurib, 2020. "Information asymmetry and the choice between rights issue and private placement of equity," BASE University Working Papers 01/2020, BASE University, Bengaluru, India.

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    More about this item

    Keywords

    Creeping acquisition; Rights issue; Business groups;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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