Title: Certification role of transparency and anchor investors in Indian IPOs

Authors: Sweta Agarwal

Addresses: LBSIM, 11/07, Sector-11, Dwarka, New Delhi 110075, India

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.

Keywords: book building process; anchor investors; institutional investors; retail investors; subscription; underpricing.

DOI: 10.1504/AAJFA.2021.111801

Afro-Asian Journal of Finance and Accounting, 2021 Vol.11 No.1, pp.35 - 63

Received: 06 Feb 2019
Accepted: 27 Jul 2019
Published online: 15 Dec 2020 *

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