Digital Adoption and Price Discovery in Shadows: Evidence from Indian IPO Grey Markets between 2016-2025
subject: firm-specific factors; grey market premium; IPO market; listing day premium; under-pricing
description: This study examines the role of digital adoption and price discovery through informal IPO markets in India. Due to price anomalies, sentiments around the IPO listing day are channelised through Informal markets known as grey markets. This study verifies the determinants of grey market IPO prices and their linkages with the formal market IPO under-pricing. Apart from dominant market and firm-specific factors, it examines how digital adoption variables such as digital payment usage and new demat accounts affect the IPO prices in both channels. In the post-pandemic period, there is a surge in the number of IPOs offered and participation of institutions and individuals in IPOs. Grey market allows traders to bid on IPO applications before they are officially listed, helping to assess under-pricing in issue prices, if any. This study uses data of 1,155 IPOs that went public in India between 2016 and 2025. Using OLS models, the study examines the relationships among variables, and findings indicate that both grey market activity and digital adoption directly influence listing day pri ces, confirming that under-pricing is predictable through informal channels. Investors should consider these factors, in addition to fundamental aspects, when making IPO investment decisions. 2025, ASERS Publishing House. All rights reserved.
creator: Suresha, B.; Krishna, T.A.; Koshy, Elizabeth Renju; Thomas, Rejoice; Karthick, C.
source: Theoretical and Practical Research in the Economic Fields;Volume;16;Issue;3;pp.771-782
publisher: ASERS Publishing House
date: 01-01-2025
rights: All Open Access; Hybrid Gold Open Access
relation: ISSN: 20687710;
format: online
language: English
type: Article
coverage: Suresha B., School of Business and Management, Christ University, India; Krishna T.A., School of Commerce, Finance and Accountancy, Christ University, India; Koshy E.R., School of Commerce, Finance and Accountancy, Christ University, India; Thomas R., School of Commerce, Finance and Accountancy, Christ University, India; Karthick C., School of Commerce, Finance and Accountancy, Christ University, India