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Certification role of transparency and anchor investors in Indian IPOs

Author

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  • Sweta Agarwal

Abstract

The study examines the effect of bidding information of anchor and other institutional investors, on retail investors' subscription and short-term IPO performance in the Indian market. The study also tries to find out specific anchor investors' characteristics which influence investor decisions. The results show that anchor investors play a certification role for institutional investors only. Both institutional and retail investors follow bids of each other during the book-building period. High institutional and retail subscriptions have a positive effect on initial returns. In anchor-backed IPOs, unique business group participation and anchor over-subscription have a high positive impact on both subscription and IPO initial returns.

Suggested Citation

  • Sweta Agarwal, 2021. "Certification role of transparency and anchor investors in Indian IPOs," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 11(1), pages 35-63.
    • Handle: RePEc:ids:afasfa:v:11:y:2021:i:1:p:35-63
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