Volume : II, Issue : IV, April - 2013

Is Institutional Participation in Initial Public Offerings a Better Signal for Investing?

S. Saravanan, Dr. R. Satish

Abstract :

IPOs that debut in a bull market get premium valuations on high demand. But post listing when market condition changes, the stocks get de-rated. Exit of the institutional investors from the shares makes the stock underperform, in which case the signaling of the IPO subscription made by institutional investors can be detrimental for the investments made by other investors. This research is aimed at can their participation be taken as a signal of a good stock, and what is level of participation by rest of the investors and knowing the correlation of their interest with short and long term gain. Test result shows that the active participation of the institutional investors is cannot be taken as a healthy signal for the rest of investors to grow up their interest in the said stock. Above research be done using data set of IPOs listed from Jan 2008 to Oct 2012.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

S. Saravanan,Dr. R. Satish Is Institutional Participation in Initial Public Offerings a Better Signal for Investing? International Journal of Scientific Research, Vol.II, Issue.IV April 2013

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