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Trust on Ipo Gr

In: Business and Management

Submitted By amenachery
Words 5964
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International Journal of Management (IJM)
Volume 7, Issue 3, March-April 2016, pp. 172–184, Article ID: IJM_07_03_016
Available online at http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=3 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
© IAEME Publication

INVESTOR EXPECTATIONS ON ‘RETURN’
AND ‘TRUST’ ON IPO GRADING: AN
EMPIRICAL ANALYSIS
Biju Thomas Muttath
Head–Finance (Star Group),
Research Scholar, R&D Centre,
Bharathiar University, Coimbatore–46, T.N, India
Dr. Assissi Menachery
Professor, Loyola Institute of Technology & Science,
K.K Dist, T.N, India
ABSTRACT
Oversubscription during IPO is the result of demand over supply due to investors’ keen interest and expectation to subscribe new shares. Grading agencies play a major role in attracting investors to subscribe shares during
IPO. This is due to the ‘trust’ that investors have on the grading agency, regarding its capability to perform research on the key fundamental indicators. Informed and knowledgeable investors act vigorously to get maximum shares during the initial public offer. Book building pricing method plays vital role in attracting the investors who anticipate efficient price discovery. The study attempts to provide insights to investors on how significantly efficient the listing prices of oversubscribed shares between 1 to
5 grades by approved rating agencies are; as well as the profitability in investing oversubscribed IPOs with respect to the 1) Close price of the listing day 2) Short term and 3) Long term returns in both manufacturing and service sector. Key words: Book building, Grading, Hot Issue Market, IPO, Under-pricing)
Cite this Article: Biju Thomas Muttath and Dr. Assissi Menachery, Investor
Expectations on ‘Return’ and ‘Trust’ on IPO Grading: An Empirical Analysis.…...

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