Investor sentiment, profitability and offer price band: evidence from the Indian IPO market

Pensiero, Dom and Krishnamurti, Chandrasekhar (2014) Investor sentiment, profitability and offer price band: evidence from the Indian IPO market. Global Economy and Finance Journal, 7 (2). pp. 59-70. ISSN 1834-5883

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Abstract

Offer price band is a crucial component of the book building process in the Initial Public Offering process of a firm. Extant research shows that investor sentiment plays a prominent role in IPO markets. We therefore suggest that investor sentiment plays a significant role in determining the offer price range. The determinants of offer price band have not been studied in the IPO literature. We fill this lacuna by studying the Indian IPO market. We hypothesise that investor sentiment will positively influence offer price band. We also posit that the profitability of a firm will be inversely related to the offer price band. Our empirical tests support these hypotheses.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 07 Dec 2014 03:16
Last Modified: 18 Jul 2016 03:03
Uncontrolled Keywords: initial public offering, investor sentiment, offer price band
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
URI: http://eprints.usq.edu.au/id/eprint/26358

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