THE EFFECT OF 2008 STOCK MARKET CRASH ON UNDERPRICING OF BOOK-BUILT IPOS: A STUDY OF INDIAN CAPITAL MARKET
THE EFFECT OF 2008 STOCK MARKET CRASH ON UNDERPRICING OF BOOK-BUILT IPOS: A STUDY OF INDIAN CAPITAL MARKET
Author(s): Ravi Singla, Divya JindalSubject(s): Economy
Published by: Universitatea SPIRU HARET - Faculty of Accounting and Financial Management
Keywords: Underpricing; IPO; 2008 stock market crash; economic crisis
Summary/Abstract: Historically, IPOs have been observed to be underpriced. There are cycles in both the volume and the average underpricing of IPOs which may be attributable to the prevailing economic conditions. A large number of IPOs are made when there is a stock market boom. In contrast there is generally a decline in the IPO activity when the stock market conditions become adverse. The stock market crash may cause a short term behavioural change amongst investors or a structural change in the market which may affect IPO underpricing. The present paper investigates the impact of Indian stock market crash in the year 2008 on the underpricing of book-built IPOs. A significant difference is found in the level of IPO underpricing in the post stock market crash period as compared to pre stock market crash period.
Journal: Journal of Academic Research in Economics (JARE)
- Issue Year: 2013
- Issue No: 3
- Page Range: 452-461
- Page Count: 10
- Language: English
- Content File-PDF