TITLE:
IPO Underpricing and Predictive Power of Board Related Corporate Governance Mechanisms: A Study of Indian IPO Market
AUTHORS:
Amit Kumar Singh, Sheetal Maurya, Amiya Kumar Mohapatra
KEYWORDS:
Corporate Governance, IPO Underpricing, Board Independence, Board Leadership, Gender Diversity on Board, Informational Asymmetry, Signalling Theory
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.6,
August
28,
2019
ABSTRACT: Role of corporate governance indicators in IPO
(Initial Public Offering) pricing is moderately researched area, however, a
majority of these researches are found to be in context of other than Asian economies. Particularly,
in context of Indian IPO market, only a few studies have been conducted in the past.
Hence, the present study aspires to bridge this gap by examining the
statistical significance of board-related corporate governance mechanisms in
predicting the likelihood of IPO underpricing. This study is unique as it
incorporates a new dimension of “board leadership” and examines the impact of
having an independent director as the chairman of the board on IPO
underpricing. Binary Logistic Regression Model is used to establish the
relationship between IPO Listing gain/loss and board-related corporate governance mechanisms viz.
participation of women directors on board, nature of board leadership and board
independence.