Download or read book The Post Issue Operating Performance of Indian IPO Firms written by Shikha Bhatia and published by . This book was released on 2017 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the change in post-issue operating performance of 300 Indian IPO firms over a three-year period relative to their pre-issue levels. Further, it explores, whether the issuing firms signal their value at the time of issue through underpricing and whether operating performance of issuing firms is reflected in their long-run stock price performance. The accounting ratios have been used as the proxy for the long-run performance of the issuing firms. Using several performance measures, it has been found that IPO firms are not able to sustain the pre-IPO levels of profitability in the after-market period.

Download or read book The Post Issue Operating Performance of IPO Firms written by Bharat A. Jain and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the change in operating performance of firms as they make the transition from private to public ownership. It documents a significant decline in operating performance subsequent to the initial public offering (IPO). Additionally, it finds a significant positive relation between post-IPO operating performance and equity retention by the original entrepreneurs but does not find any relation between post-IPO operating performance and the level of initial underpricing. Post-Issue declines in the market-to- book ratio, P/E ratio and the earnings per share are also documented.

Download or read book Agency Problems and Operating Performance in an Emerging Market written by Manas Mayur and published by . This book was released on 2013 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study examines the following two interrelated research issues: (i) how the operating performance of Indian firms changes around the time firms do their Initial Public Offerings (IPOs)? and (ii) how the post-IPO performance of Indian firms is related to the changes in insiders' ownership around their IPOs? It is found that performance of Indian firms deteriorates significantly post IPO. The panel data analysis of 306 Indian firms examined the relationship between ownership and performance. The results illustrated a curvilinear relationship between ownership and performance. Whereas the negative relationship was found for low and very high ownership level and positive relationship was found for intermediate level. This is an attention-grabbing outcome as it contrasts with earlier studies on curvilinear relationship between ownership and performance, where the negative relationship was found for intermediate level and positive relationship was found for both very low and very high ownership level.

Download or read book Post IPO Mergers and the Operating Performance of IPO Firms written by 林佑蓉 and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Market Timing and Operating Performance in an Emerging Market written by Manas Mayur and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this paper is to investigate the market timing behaviour of issuers of Indian Initial Public Offerings (IPOs). The declining trend in variables reflecting investor's sentiments and expectation in post IPO period suggested that firms took advantage of over-optimism of investors. The deterioration in post IPO performance suggested that issuer took benefit of pre IPO profit margin. In order to confirm whether IPOs were timed or not a new variable HOT was constructed which basically referred to favourable market condition for the issuers. The result based on multivariate regression suggested that Market timers, identified as firms that go public when the market is hot, tried to maximize the total proceeds at the time of IPO proving that IPOs were timed. The hot issue market effect was found to be remarkably robust; it was significant for both firm and industry-level characteristics.

Download or read book Ownership Structure and Operating Performance of IPOs in India written by Shikha Bhatia and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The anomalous behavior of Initial Public Offerings (IPOs) has been extensively researched and debated. Numerous studies have documented stock price and operating underperformance of IPOs and suggested several reasons like earnings management, timing of issues, agency theory, etc., as causing such decline in post-issue performance. This study attempts to examine the operating performance of IPOs in India for a period of five years subsequent to the issue. It specifically seeks to analyze the post-issue operating performance relative to pre-issue levels and to determine the relationship between ownership retained by the promoters and operating performance of issuing firms.

Download or read book Intended Use of Proceeds and the Post Issue Operating Performance of IPO Firms written by Andriansyah and published by . This book was released on 2014 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the link between intended use of proceeds and the decline in post-issue operating performance of IPO firms. After taking into account special features of the compositional data containing zero values, a quantile regression analysis is employed for the Indonesian equity market data over the period of 2000-2010. The results show that the post-issue performance can be explained by different types of intended use of proceeds. Fixed asset investment and investment in stock market shares will lead to better operating performance for average and high performing firms only. Allocation to other usages leads to poor operating performance. The findings were found to be robust when ownership structure was included in the models. These results have policy implications for the management of IPO proceeds.

Download or read book Earnings Management and Long run Post issue Performance of IPOs in India written by Mamta Dhanda and published by . This book was released on 2020 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The controversies surrounding accounting figures bring forth the downgraded quality of financial statements in India. Opportunistic management of earnings at the cost of stakeholders' interest requires prompt regulatory measure as they may become grave in high profile corporate events like mergers and public issues. Focusing on one of the most important mega events of initial public offerings (IPOs) the present study evaluates the accounting figure of IPOs that came out during April 2010 to March 2013. The study measures pre and post issue earnings management for a time span of 11 years from April 2008 to March 2019 and post issue long run earnings and stock performance using Modified Jones Model (1995) for a time span of seven years including issue year and six post issue years. The study provides evidence of earnings management by Indian IPO firms and post issue earnings and stock underperformance due to reversal of discretionary current accruals of issue year. The study emphasizes on better monitoring and regulatory environment and precise definition of accounting choices to control managed accounts to avoid frequent fraud incidents.

Download or read book Pricing and Performance of Initial Public Offerings in the United States written by Arvin Ghosh and published by Routledge. This book was released on 2017-07-05 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this timely volume on newly emerging financial mar- kets and investment strategies, Arvin Ghosh explores the intriguing topic of initial public offerings (IPOs) of securities, among the most significant phenomena in the United States stock markets in recent years. Before the 2000-2001 market turndown, hardly a week went by when more than a few companies did not become public, either in the organized stock exchange or in the Over the Counter (OTC) market. In the often over-burdened, technology-heavy Nasdaq market, the role of IPOs was crucial for the market's new vigor and growth. Internet stocks were able to find a mode to supply key momentum to the market. In the so-called "New Economy" of the 1990s, it was the seductively accessible IPO that ushered in the world's information technology revolution.Ghosh sets out to examine the pricing and financial performance of IPOs in the United States during the period 1990-2001. In the opening chapter he discusses the rise and fall of IPOs in the preceding decade. Chapter 2 further delineates the IPO process from the start of the prospectus to the end of the "quiet period" and aftermarket stabilization. In chapter 3 Ghosh analyzes the mispricing and deliberately deceptive underpricing, or "flipping," of Internet IPOs. Chapter 4 delves deeper into the pricing and operating efficiency of Nasdaq IPOs. Chapter 5 analyzes the pricing and long-run performance of IPOs both in the New York Stock Exchange and in the Nasdaq markets. In chapters 6 and 7 the author deals with the pricing and performance of the venture-blocked and nonventure-backed IPOs in general and Internet IPOs in particular. In chapter 8 he analyzes the role of underwriters as market makers. In chapter 9 Ghosh discusses the accuracy of analysts' earnings forecasts. In the concluding chapter, he summarizes the principal findings of the study and the recent revival of the IPO market and its place in capital formation as well as the latest developments in t

Download or read book Venture Capital Activity in India written by Duong Thuy Do and published by . This book was released on 2013 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents new empirical evidence on the certification role of venture capital firms in India, an economy characterized by a high degree of information asymmetry. We first present a detailed description of venture capital activity in India between 2000 and 2012. We then analyze the post-issue operating performance of firms that underwent initial public offering (IPO) firms. Results indicate that Indian IPO firms underperform relative to industry medians in the first three years after going public. Finally, we compare operating performance between venture capital (VC) backed IPO firms and non-VC backed IPO firms. Results indicate that VC backed IPO firms are associated with higher growth rates in sales and capital expenditures and a better performance in operating cash flows but are less profitable than non-VC backed IPO firms.

Download or read book Transparency in IPO Mechanism written by Suman Neupane and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this doctoral thesis we bring together some empirical analysis on investors' participationin initial public offering (IPOs) from a market whose characteristics are unique andsignificantly different from US and other important IPO markets. There are two importantfeatures which distinguishes the Indian IPO market. First, the Indian IPO market ischaracterised by a high level of transparency. Information on the participation of differentinvestor categories is publicly available during the offer period on a real time basis. Second, Indian IPO firms are also required to reserve and allocate pre-determined fraction of totalshares on offer to different investor categories participating in the IPO. Our first empirical study shows that the transparency in the mechanism creates highlyinelastic demand curves for a large number of IPOs. Analysis of demand over-time showsthat while institutional investors take the lead in subscribing to strong IPOs, noninstitutionalinvestors do so in weak IPOs, but perhaps not always with an honest intent. Our analysis of IPO pricing shows that favourable demand by uninformed investors ispositively associated with a high IPO price. Further, while reputed underwriters appear toexercise far more caution and restraint in setting prices, we find that in a large number ofIPOs, less reputed underwriters ignore information produced during the offer period and setthe price at the upper bound of the price range. Our findings suggest that the transparencyin allocation mechanism appears to be a double edged sword for the uninformed (retail)investors. We recommend a change in the current regulation to protect investor's welfare. We also examine the influence of the participation of different investor categories on initialreturns. Unsurprisingly, we find that while the participation of both the informed investorcategories significantly influences initial returns, the participation of retail investor lossesits significance in explaining initial returns for bookbuilding and auction IPOs. We alsoanalyse the participation of informed institutional investors to examine whether thepresence of new bank loans at the time of the IPO reduces information asymmetry. Ourresults show that presence of bank loans do not appear to reduce information asymmetry asinstitutional investors participate significantly less in IPOs with new bank loans. While thisresult is contrary to prior studies on bank loan announcements, it is consistent with a recentstudy which shows that prior studies on bank loan announcements are plagued by sampleselection issues. In our final empirical analysis we examine the participation of employees in IPOs andanalyse whether such participation can predict superior financial and operating performanceof the firm. We find that IPOs with high employee participation offer significantly higherinitial returns than IPOs with low employee participation. We also find that firms with highemployee participation in their IPOs exhibit superior post IPO operating performance. Further, we find that the prior participation of other investor categories, in particular theinstitutional investors, does not appear to influence the participation of employees in IPOs. Our results suggest that employees have valuable private information about the quality ofthe firm. The evidence presented in the study suggests that in the context of Indian IPOs, where data on investors' participation is available on a real time basis, uninformedinvestors may use information on employee participation to select well performing IPOs.

Download or read book Relationship between the Changes in Ownership and Performance of Indian Firms Around IPO written by Manas Mayur and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The study investigates the change in performance of Indian public firms post to their Initial Public Offerings (IPOs) and its relationship with the changes in the insiders' ownership around the time firms do their IPOs. A three step methodology is followed. First, the pre-IPO performance of a sample of Indian publicly listed firms is compared with their post-IPO performance. Second, a univariate analysis is carried out wherein the median of post-IPO performance of sampled firms having low level of insiders' ownership in the post-IPO period is compared with the median of post-IPO performance of sampled firms having high level of insiders' ownership in the post-IPO period. Finally, multivariate analysis is done in form of a panel data regression model to assess the effect of changes in the insiders' ownership around the time firms do their IPOs on the post-IPO performance of the firms. It is found that: (a) performance of entire sample of publicly listed Indian firms deteriorates significantly post to their IPOs; and (b) firms having low levels of insiders' ownership in the post-IPO period experienced the greatest decrease in their post-IPO performance. It is concluded that the changes in the level of insiders' ownership are inversely proportional to changes in performance of firms around the time firms do their IPOs.

Download or read book The Impact of Venture Ecapital on Post IPO Operating Performance and Related Aspects of Firm Behavior written by Sam Mensah and published by . This book was released on 1994 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Operating Performance of Initial Public Offerings written by Arif Khurshed and published by . This book was released on 2013 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the post-issue operating performance of UK Initial Public Offerings. Using several measures, we find that the performance of firms going public on the Official List deteriorates significantly after the issue. On the contrary, IPO-firms on the Alternative Investment Market (AIM) use the IPO as springboard for growth without sacrificing their profitability. The AIM is, indeed, the first market where operating performance is not found to be declining after the IPO. The listing on the AIM does not affect significantly the leverage of the firms, but gives the opportunity to raise fresh funds, both at the time of the initial offering and through further (debt or equity) capital raisings. Conversely, the permanent decrease in leverage after the IPO on the Official List characterizes the flotation on this market as a mean to rebalance the firms' capital structure.

Download or read book Handbook of Research on IPOs written by Mario Levis and published by Edward Elgar Publishing. This book was released on 2013-11-29 with total page 599 pages. Available in PDF, EPUB and Kindle. Book excerpt: The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a

Download or read book The Operating and Shareprice Performance of Initial Public Offerings written by Arif Khurshed and published by . This book was released on 2005 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the post-issue operating performance of UK Initial Public Offerings. Using several measures, we find that the performance of firms going public on the Official List deteriorates significantly after the issue. On the contrary, IPO-firms on the Alternative Investment Market (AIM) use the IPO as springboard for growth without sacrificing their profitability. The AIM is, indeed, the first market where operating performance is not found to be declining after the IPO. The listing on the AIM does not affect significantly the leverage of the firms, but gives the opportunity to raise fresh funds, both at the time of the initial offering and through further (debt or equity) capital raisings. Conversely, the permanent decrease in leverage after the IPO on the Official List characterizes the flotation on this market as a mean to rebalance the firms' capital structure.

Download or read book The Long run Performance of Private Equity backed IPOs in the US and the UK written by Luca Fritz and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies the long-run performance of Private Equity-backed and non Private Equity-backed Initial Public Offerings between the years 2000 and 2012 in the United States and the United Kingdom. Using a unique data sample of 141 PE-backed and 185 non PE-backed IPOs between 1-10 billion in market capitalisation, this study measures the statistical significance of their abnormal performance three years after the IPO using all of the conventional performance measurement methodologies. Due to the measurements' considerable shortfalls, a new abnormal return measurement was developed, which allows for a new perspective on long-term performance by taking into account the companies' financial and industry risk, as well as investors' return expectations. Contrary to prior research, it was found that PE-backed IPOs do not outperform the market, while non-backed IPO firms do, especially in the US. Furthermore, companies that went public in years of heavy IPO activity did not underperform worse. It could also not be shown that IPO firms in technological industry sectors exhibit worse long-run returns compared to others. Lastly, a considerable impact of firm size on post-issue operating performance could be established, despite the size restricted sample. Measurement issues in long-run IPO performance studies were, however, clearly brought to light.