Domestic and foreign institutional investors' investment in IPOs
File version
Author(s)
Neupane, Biwesh
Paudyal, Krishna
Thapa, Chandra
Griffith University Author(s)
Primary Supervisor
Other Supervisors
Editor(s)
Date
Size
File type(s)
Location
License
Abstract
The regulatory provisions in India ensure that IPO investors are able to observe the participation levels of other subscribers prior to their own subscription decisions. This should reduce the information asymmetry between the foreign institutional (FIIs) and domestic institutional investors (DIIs). We argue that because of this setting we should observe less difference in their investment patterns and performance. Our results, however, show that (a) FIIs subscribe to IPOs more aggressively than DIIs; (b) DIIs have better IPO selection ability than FIIs; and (c) in the post-listing period, FIIs reduce their IPO holdings more extensively than DIIs. FIIs reduce their post-listing holdings especially in firms that are smaller, younger, have higher stock volatility while increasing on stocks with higher returns, indicating that FIIs chase hot markets. Overall, in spite of transparency-enhancing regulations, the investment patterns of FIIs and DIIs differ significantly.
Journal Title
Pacific Basin Finance Journal
Conference Title
Book Title
Edition
Volume
39
Issue
Thesis Type
Degree Program
School
Publisher link
Patent number
Funder(s)
Grant identifier(s)
Rights Statement
Rights Statement
Item Access Status
Note
Access the data
Related item(s)
Subject
Banking, Finance and Investment not elsewhere classified
Accounting, Auditing and Accountability
Banking, Finance and Investment
Domestic institutional investors
Foreign institutional investors
Information asymmetry
Indian IPOs