Indian Journal of Finance
By: Associated Management Consultants (P) Ltd.Single Issue
Single Issue
- IJF-Dec12-Article2-INVESTOR PREFERENCE AND PROMOTER'S OWNERSHIP PATTERN IN GRADED IPOS OF INDIA
- Price : 80.00
- Published on March 27, 2013
- Associated Management Consultants (P) Ltd.
- Issues 356
- Language - English
- Published daily
About this issue
SEBI, the Indian securities market regulator, has set a unique example for the entire world by introducing IPO grading in India in 2006 on an optional basis, and further mandating it from May 2007. The purpose of this grading was to provide retail investors with a ready-made assessment of the fundamental quality of the issuer of an IPO, so that they could make a better and informed investment decision in an era of information overload. Grading of IPOs is subject to severe criticism. Critics question efficacy and effectiveness of this process. However, the findings of this paper suggest that IPO grading does influence investor preference and demand. Further, strong negative effect on post-issue promoter's ownership holding is noted. The paper infers that all investor classes, including retail investors, benefit from IPO grading. Keywords: IPOs, IPO Grading, Investor's Preference, Oversubscription, Promoters' Holding JEL Classification: G11, G14, G15, G18, G32
About Indian Journal of Finance
Indian Journal of Finance, a source of sophisticated analysis of developments in the rapidly expanding world of finance, is a monthly journal with topics ranging from corporate to personal finance, insurance to financial economics and derivatives.