Impact of open offer announcements on shareholders' wealth: evidence from India
by Vinay Kumar Vemula; Juhi Gupta; Smita Kashiramka
International Journal of Financial Services Management (IJFSM), Vol. 10, No. 4, 2020

Abstract: In an efficient market, stock prices reflect all the publicly available information so as to result in zero abnormal returns. The efficiency of the market is gauged using the time taken by stock prices to adjust and reflect newly available information. The current study uses an open offer as an event to assess the efficiency of the Indian stock market by employing the event study methodology on a sample of 96 open offers made during the period 2011 to 2017. The findings suggest that open offer announcements create substantial positive returns for the target firm shareholders; thus, depicting the inefficiency of the Indian stock market in the semi-strong form. Further, segregating the sample based on the motive of the offer and the success of the open offer, the study reports different factors to be influencing the abnormal returns.

Online publication date: Mon, 22-Feb-2021

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