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Foreign capital raising by Indian firms: An examination of domestic stock price response

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  • Meisami, Alex
  • Misra, Lalatendu
  • Mehran, Jamshid
  • Shi, Yilun

Abstract

We examine the domestic stock price response to foreign capital issuance by Indian firms. Firms have extensively used foreign equity and convertible foreign debt sources since 1994. The role of foreign investment bankers, size of the issue, firm's growth opportunities, and other factors are examined in the cross-sectional analysis of domestic stock price response. We find that firms experience positive stock price response to both equity and debt issues abroad, with greater response to issuance of American Depositary Receipts (ADRs), and financing high corporate growth.

Suggested Citation

  • Meisami, Alex & Misra, Lalatendu & Mehran, Jamshid & Shi, Yilun, 2014. "Foreign capital raising by Indian firms: An examination of domestic stock price response," Global Finance Journal, Elsevier, vol. 25(3), pages 181-202.
    • Handle: RePEc:eee:glofin:v:25:y:2014:i:3:p:181-202
    DOI: 10.1016/j.gfj.2014.10.002
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    More about this item

    Keywords

    Stock price response; Capital raising; Financial market; Economic liberalization;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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