Title: Macroeconomic variables and IPO activities: an empirical investigation in Indian market

Authors: Pritpal Singh Bhullar; Seshadev Sahoo

Addresses: University Business School, Maharaja Ranjit Singh Punjab Technical University, Bathinda, India ' Department of Finance and Accounting, Indian Institute of Management, Lucknow, India

Abstract: The present study intends to examine the effect of selected macroeconomic variables on the initial public offerings (IPO) activity (i.e., volume of IPOs) issued during 2011 to 2020 in the Indian capital market. This study used seven macroeconomic factors, i.e., gross domestic product at constant prices, business confidence index, foreign direct investment in equity inflow, yield on five-year corporate bonds, yield on three-month T-Bills on the secondary market, interbank rate, and performance of the Bombay Stock Exchange, India sensitivity index (BSE Sensex as market benchmark) as independent variables. Econometric tools like vector auto regression, variance decomposition test, and impulse response functions were applied to the selected time series data. We find that the business confidence index, gross domestic product, BSE index performance, and foreign direct investment have significant effects on IPO activities. Furthermore, these macroeconomic variables show their impact over a period.

Keywords: Indian capital market; IPO activity; macroeconomic variables; VAR; initial public offerings.

DOI: 10.1504/IJSE.2023.129825

International Journal of Sustainable Economy, 2023 Vol.15 No.2, pp.226 - 244

Received: 29 Sep 2021
Accepted: 08 Dec 2021
Published online: 31 Mar 2023 *

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