Risk disclosure in IPO advertisement and the quality of the firm

Supriya Katti, Edward R. Lawrence and Mehul Raithatha

Journal of Financial Markets, 2023, vol. 64, issue C

Abstract: We compare the IPO issuing firms in India that disclose risk in their advertisements with the firms that do not disclose such risks and find 31% higher underpricing in firms that disclose risk. For the risk disclosing firms, we find a significantly higher subscription from institutional investors. The difference in the subscription from retail investors for the two groups of firms is insignificant. The firms that disclose risk in their ads have superior performance in the post IPO period as compared to the firms that do not disclose such risk.

Keywords: IPO; Risk disclosures; Quality of firm; Underpricing; IPO subscription (search for similar items in EconPapers)
JEL-codes: G12 G15 G24 G32 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1386418122000787
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:64:y:2023:i:c:s1386418122000787

DOI: 10.1016/j.finmar.2022.100789

Access Statistics for this article

Journal of Financial Markets is currently edited by B. Lehmann, D. Seppi and A. Subrahmanyam

More articles in Journal of Financial Markets from Elsevier
Bibliographic data for series maintained by Catherine Liu ().