THE ROLE OF UNDERWRITERS IN THE SUCCESS OF IPOs: EVIDENCE FROM THE INDIAN MARKET

Abstract

The role of underwriters in the success of Initial Public Offerings (IPOs) is crucial, particularly in emerging markets like India, where market dynamics are rapidly evolving. This paper examines the influence of underwriters on the performance of IPOs in the Indian market, analyzing various factors that contribute to a successful offering. It explores the relationship between underwriting quality, underwriter reputation, and the pricing, subscription, and post-listing performance of IPOs. By using a dataset of IPOs launched in India over the past decade, this study investigates how underwriters’ expertise, market knowledge, and promotional activities impact the success of an IPO. The findings suggest that underwriters with higher reputation and strong market presence tend to ensure more successful offerings, with better subscription rates and less volatility in the post-listing phase. Furthermore, this research highlights the importance of underwriters in building investor confidence and mitigating the risks associated with the IPO process in India’s dynamic market.