Corporate Governance and IPO Underpricing

Abstract

Corporate Governance influence the companies to manage their organization in such a way to achieve the long term strategic goals to satisfy the shareholders, creditors, employees, customers, suppliers, and complying with the legal and monitoring requirements, apart from meeting environmental and local community needs. Corporate Governance is administered to provide the maximum benefits to the stakeholders. The evaluation on the basis of its listing and its returns, describes the customary valuation of such IPO. There is always an impact of the edifice of the management on the pricing of IPOs, the status of directors also affect its pricing structure. It also depends upon the policies, norms and legislative structure of the management. This is a pragmatic study that examines the pricing of IPOs and the initial performance of such IPOs in Indian capital market. It also describes the impact of corporate governance on pricing of Initial Public Offers, and also outlines the relationship between corporate governance and underpricing of IPOs.

View PDF