From frenzy to flip: Unpacking foreign investor behavior in the wake of regulatory change

M A Aneesha and P J Jijo Lukose

Finance Research Letters, 2025, vol. 73, issue C

Abstract: This study investigates the effects of a regulatory change that enabled a new category of Foreign Portfolio Investors (FPIs) to participate in the Indian IPO market. We find a significant increase in FPI demand and their share in the total institutional holdings post-regulation. Further, we observe a significant rise in flipping activity accompanied by a decline in FPI holdings during the two quarters after an IPO. Despite these changes, the level of information uncertainty remains largely unchanged. These findings underscore regulatory interventions' complex and multifaceted consequences on FPI behavior and its broader implications for IPO market dynamics.

Keywords: IPO; Regulation; Foreign portfolio investors; Flipping; Information uncertainty (search for similar items in EconPapers)
JEL-codes: G11 G14 G28 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s154461232401674x

DOI: 10.1016/j.frl.2024.106645

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