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The Relationship between IPO Underpricing Phenomenon & the Underwriter’s Reputation

Author

Listed:
  • Satyendra Kumar Sharma

    (Faculty BITS Pilani, India)

  • Ankit Seraphim

    (Faculty BITS Pilani, India)

Abstract

The primary focus is on studying the under pricing phenomenon in Indian IPO markets. The paper examines the link between the reputation of underwriters to an IPO issue & the level of under pricing of that issue. The underwriters of high reputation have a pricing behavior which is distinct from underwriters in other markets. The investment banks are compared on the basis of the number of issues managed; deal value, syndicate size etc & the top banks were found to under price less as compared to their lower ranked counterparts. The post listing returns are directly related to the number of times the IPO issue is oversubscribed. The study is based on Indian IPO offerings.

Suggested Citation

  • Satyendra Kumar Sharma & Ankit Seraphim, 2010. "The Relationship between IPO Underpricing Phenomenon & the Underwriter’s Reputation," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(38), pages 181-209, December.
    • Handle: RePEc:rej:journl:v:13:y:2010:i:38:p:181-209
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    References listed on IDEAS

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    Cited by:

    1. Sheena Chhabra & Ravi Kiran, 2022. "Impact of information on winners' curse and long run performance of initial public offerings," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 975-992, January.

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    More about this item

    Keywords

    IPO; Post Issue Promoter Holding(PIPH); Offer size; Syndicate size; Underpricing; Underwriters; List price; Issue price; Lead managers; Price band; Age of firm; Investment Bank Prestige; Oversubscription;
    All these keywords.

    JEL classification:

    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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