The Value of Unaffiliated Analyst Recommendations before the IPO: Evidence from Indian IPOs

Singh, Kulbir and Vishwanath, S R (2013) The Value of Unaffiliated Analyst Recommendations before the IPO: Evidence from Indian IPOs. International Research Journal of Applied Finance, 4 (4). pp. 652-686.

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Abstract

Brokerage firms and financial press spend considerable amounts of money on security analysis. While many papers on the value of brokerage recommendations of listed firms have been published, little research has been done to understand the value of brokerage recommendations available before the offer, primarily because recommendations are usually unavailable before the IPO. We bridge this gap by studying the 703 recommendations of 257 IPO firms in India during 2001-2010. We find that positive analyst recommendations have a significant impact on IPO subscription, underpricing, and listing day trading volume. There is also some evidence that IPOs with a positive recommendation have better long-term performance. We conclude that IPO security analysis is useful for investors and issuers.

Item Type:	Article
Uncontrolled Keywords:	Initial Public Offerings;Certification;Underprising;Trading Volume;Information Aquisition
Subjects:	Finance
Divisions:	Finance and Strategy
Depositing User:	Mr. Ramesh Kamath
Date Deposited:	10 Sep 2018 16:17
Last Modified:	12 Sep 2018 10:32
URI:	http://tapmi.informaticsglobal.com/id/eprint/37

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