Title: Impact of corporate governance and underwriter reputation on IPO underpricing: an Indian market perspective

Authors: Abhrajit Sarkar; Ayush Kumar; Rajan Pandey

Addresses: Department of Economics and Finance, Birla Institute of Technology and Sciences, Pilani, 333031, India ' Department of Economics and Finance, Birla Institute of Technology and Sciences, Pilani, 333031, India ' Department of Economics and Finance, Birla Institute of Technology and Sciences, Pilani, 333031, India

Abstract: This paper examines the impact of corporate governance and underwriters' reputation on initial public offering (IPO) underpricing among firms offering IPOs in the Indian equity market. To capture the impact of corporate governance mechanisms on initial returns, we have analysed 338 underpriced IPOs from 2003 to 2019. Our findings suggest that director independence and the underwriters' reputation are negatively and significantly associated with the underpricing of IPOs. We also find evidence suggesting a positive but statistically insignificant association between CEO duality and the extent of underpricing. This paper examines the intricate interplay among IPO underpricing, underwriter reputation, CEO Duality, and the independent fraction of directors. It underscores the pivotal role of governance dynamics and underwriters' reputations in influencing underpricing levels within the Indian market.

Keywords: IPO; initial public offering; underpricing; board structure; economic policy; corporate governance; independent directors; Indian equity market; board independence.

DOI: 10.1504/IJMABS.2026.152181

International Journal of Markets and Business Systems, 2026 Vol.7 No.1, pp.1 - 27

Received: 09 Jun 2025
Accepted: 27 Jul 2025
Published online: 10 Mar 2026 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article