What is it about?
Seasoned equity offering (SEO) is a method of raising equity capital by issuing shares to the public, usually at a price below the prevailing market price, by firms already listed on the stock exchanges. In India, it is called Follow-on Public Offerings (FPOs). It is common that when companies go public through initial public offerings (IPOs), shares issued through these IPOs generally experience two kinds of anomalies— underpricing and long-run underperformance. If the price quoted on the listing day, especially the closing price, is significantly higher than the issue price, it is called underpricing. Similarly, if the long-run return with listing day closing price as the base is negative, it is called underperformance. In this study, we examine the presence of windows of opportunity for SEOs taking a sample of 162 SEOs announced by firms listed on Bombay Stock Exchange (BSE), India, during the years 1992 to 2012.
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Why is it important?
To the best of our knowledge, this is the FIRST RESEARCH on pricing of Seasoned Equity Offerings (SEOs ) in India.
Perspectives
I hope you find this article thought-provoking.
Professor Iqbal Thonse Hawaldar
Kingdom University
Read the Original
This page is a summary of: Windows of opportunity and seasoned equity offerings: An empirical study, Cogent Economics & Finance, September 2018, Taylor & Francis,
DOI: 10.1080/23322039.2018.1528688.
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