Impact of Ind-AS on IPO Underpricing in India

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Authors

  • Anil Kumar
     Professor, Department of Commerce, University of Delhi, New Delhi – 110007, Delhi ,IN
  • Madhu Totla
     Assistant Professor, Shaheed Sukhdev College of Business Studies, University of Delhi, New Delhi – 110089, Delhi ,IN

DOI:

https://doi.org/10.18311/jbt/2023/33184

Keywords:

IFRS, Ind-AS, Information Asymmetry, IPO, Underpricing

JEL Classification: G39, M410

Abstract

The present study analyses the collaborative endeavours associated with the evolving modifications in the procedures and regulations governing initial public offering (IPO) processes in India. Partly spurred by the mandated adoption of the Ind-AS (Indian Accounting Standards), which are aligned with International Financial Reporting Standards (IFRS), the study employs a student’s t-test along with multivariate regression on 126 firms listed in India between April 2013 to March 2020 on both BSE and NSE to examine the impact of changes in accounting standards on IPO under-pricing in India. The study finds substantial evidence that transitioning from AS (erstwhile accounting standards based on Generally Accepted Accounting Principles-GAAP) to Ind-AS improved market efficiency and reduced under-pricing. The adoption of Ind-AS also demonstrates a significant impact on the investing community’s investing perception. Further, the study finds that the mean under-pricing was not affected for firms supported by venture capital and group affiliation. The study concludes that regulatory bodies should prioritise enhancing transparency in offer documents to mitigate information asymmetry. This study is a pioneering effort in examining the Indian stock market, serving as foundational research that may be used in future investigations.

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Published

2023-12-08

How to Cite

Kumar, A., & Totla, M. (2023). Impact of Ind-AS on IPO Underpricing in India. Journal of Business Thought, 14, 107–119. https://doi.org/10.18311/jbt/2023/33184

Issue

Volume 14, 2023

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Articles

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Copyright (c) 2023 Anil Kumar, Madhu Totla

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

All the articles published in JBT are distributed under a creative commons license. The journal allows the author(s) to hold the copyright of their work (all usages allowed except for commercial purpose).
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Europe PMC
Received 2023-02-28
Accepted 2023-12-02
Published 2023-12-08

 

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