Impact of accounting conservatism on IPO under-pricing: evidence from India

Sreenu, Nenavath; Pradhan, Ashis Kumar; Xuan, Vinh Vo; Naik, B. Koteswara Rao

doi:10.1080/23322039.2022.2132641

Cited by 3 publications

(1 citation statement)

References 42 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Sreenu et al studied whether the use of accounting conservatism in India reduced IPO underpricing, which is a concern of stakeholders and regulators. In addition, this study also examined how information asymmetry affects the meaning of IPO accounting conservatism (Sreenu et al, 2022). Therefore, this paper proposes a research on vertical concurrent executives, TMT heterogeneity and IPO underpricing-evidence from China's stock market.…”

Section: Introductionmentioning

confidence: 99%

Analysis of TMT heterogeneity and IPO underpricing of listed companies in the low carbon economy sector: Evidence from China’s stock market

Zhou

Gao²,

Ren³

2023

Front. Energy Res.

View full text Add to dashboard Cite

Introduction: Issuance pricing is an important part of the operation of the securities market. Its pricing is directly related to the interests of issuers, investors and underwriters, as well as the regulatory and resource allocation functions of the securities issuance market. When the industry expectations vary greatly, the company has greater TMT heterogeneity. When the market expectation gap expands, the possibility of risk conversion increases. IPO underpricing occurs in stocks of developed countries, developing countries and emerging countries. Because the issuer and the underwriter investors have different information, for example, the information advantage of the underwriter will bring risks to investors when purchasing IPO shares. IPO underpricing is a compensation for the risks brought by information asymmetry.Methods: At present, little attention has been paid to how the value of listed companies affects the underpricing of intellectual property. This paper will fill in this gap and empirically study the impact of management ability of senior management team on IPO underpricing. Therefore, starting from the Chinese stock market, this paper studies the evidence of vertical parallel executives, heterogeneity of senior management team and IPO underpricing.Results: The average values of NCSKEW (C1) and DUVOL (C2) were −0.301 and −0.203, respectively, which were close to the descriptive statistics of the study.Discussion: The dependent variable data in this paper has certain reliability. The minimum value of NCSKEW is −0.361 and the maximum value is 0.392, indicating that the fragmentation risk of different stocks is relatively high.

show abstract

Section: Introductionmentioning

confidence: 99%

Analysis of TMT heterogeneity and IPO underpricing of listed companies in the low carbon economy sector: Evidence from China’s stock market

Zhou

Gao²,

Ren³

2023

Front. Energy Res.

View full text Add to dashboard Cite

show abstract

Effects of financial characteristics on accounting conservatism of listed companies in Vietnam stock exchange

Phuong Hong,

Tra My

2024

Cogent Business & Management

View full text Add to dashboard Cite

Accounting Conservatism, IPO Underpricing, and Post-issue Stock Performance of Indian SMEs

Saravanan,

Shree,

Firoz

2024

FIIB Business Review

View full text Add to dashboard Cite

This study aims to investigate the influence of accounting conservatism on the underpricing phenomenon observed in Initial Public Offerings (IPOs) of small- and medium-sized enterprises (SMEs) in India. For this investigation, the study specifically focuses on two major dimensions of conservatisms, namely, conditional conservatism and unconditional conservatism. The sample for this investigation consists of 254 SMEs that underwent IPOs between 2013 and 2022 and subsequently got listed in the NSE Emerge Index. Employing a multivariate regression analysis, the findings indicate a significant and negative association between both conditional and unconditional conservatism and IPO underpricing in the SME market. This result implies that the adoption of conservative accounting practices plays a prominent role in curtailing the underpricing tendencies observed in SME offerings. Furthermore, an investigation of long-term IPO performance using a buy-and-hold abnormal return approach indicates that the presence of conditional conservatism positively impacts IPO performance in the long run. Conversely, unconditional conservatism is found to have a detrimental effect on the long-term performance of SME IPO issues. Overall, the outcomes demonstrate that investors stand to gain from informative financial statements that result from the adoption of conservatism. However, it is critical that conservatism is selectively applied to avoid excessive understatement of firm value. The study findings highlight the nuanced relationship between accounting conservatism and IPO performance and offer valuable insight that can benefit firm managers, underwriters, and lead managers involved in the IPO process.

show abstract

Impact of accounting conservatism on IPO under-pricing: evidence from India

Cited by 3 publications

References 42 publications

Analysis of TMT heterogeneity and IPO underpricing of listed companies in the low carbon economy sector: Evidence from China’s stock market

Analysis of TMT heterogeneity and IPO underpricing of listed companies in the low carbon economy sector: Evidence from China’s stock market

Effects of financial characteristics on accounting conservatism of listed companies in Vietnam stock exchange

Accounting Conservatism, IPO Underpricing, and Post-issue Stock Performance of Indian SMEs

Contact Info

Product

Resources

About