This article investigates the impact of women directors on financial outcomes—return and risk of Indian companies. It applies fixed and random effects Tobit regressions to examine the effect of female directors on financial outcomes (returns and risk) of the firm, controlling promoters’ shareholding, leverage, firm growth and age, board size and board meetings. The study does not find any support to agency and resource dependence theories because the proportion of women directors in most Indian boards is too small to make much impact. However, it has a moderating influence to reduce variations in accounting profits and stock returns. The investors reward also meeting the regulatory quota of woman member on the boards by higher market returns indicating a signalling effect. The study adds an understanding of quota induced women directors’ influence on the firm’s financial outcomes. However, the regulators should be cautious in mandating induction of women members on the boards as they might be inexperienced or lack the needed grounding to effectively influence board processes.
The small scale sector plays a vital role in the economic development of the country. It helps in increasing employment opportunities, production, export, and capital formation in the economy. The small scale sector solves the problem of regional imbalances and concentration of industries in few select areas. In India, this sector has been playing an important role in the economic development of the country. The number of small-scale units has
Setting up of National Financial Reporting Authority (NFRA) in India as an independent regulator to audit the auditors has renewed a debate on "peer review" and "independent review". While the global practice is that of an independent oversight over the auditors, the professional body of auditors in India-Institute of Chartered Accountants of India (ICAI) is opposed to the move of the government to appoint a regulator over auditors. This paper examines the perception of auditors and other stakeholders in India on the mechanism of auditing the auditors. The study finds that all stakeholders including practicing public accountants believe that the present state of auditing is not satisfactory in India. The difference in perception is on the setting up of the independent authority (NFRA) to audit the auditors. While the chartered accountants in India believe that self-regulation over the auditors through the existing mechanism may be made more effective, the other stakeholders overwhelmingly support the quasi-regulatory body for independent review of audit service.
The study of investor behaviour in and around tail events is important as these impact market returns. Since the onset of the COVID-19 pandemic, financial markets worldwide have seen enormous falls amid widespread uncertainty initially and then bounced back strongly with greater momentum. This article investigates the short-term performance of public issues which had their debut on the Indian Stock exchanges during the time of the COVID-19 pandemic. It also analyses the impact of fear of the pandemic on underpricing, if any and the factors impacting their performance. It compares the pre-COVID and post-COVID initial public offerings (IPOs) in Indian Capital Market with a sample of 158 listings across nine years from 2013 to 2021 on the main board segment of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). With the help of the t-test and multivariate regression applied on subscription data, listing data, listing gains, issue size, return on net worth, age and other factors, a more active retail investor group emerges with a statistically significant increase in underpricing during the COVID-19 era. The study provides strong evidence that the pandemic contributed towards increase in number of firms getting listed and higher levels of underpricing. It also suggests that the impact was particularly on the investors’ sentiment with increase in retail subscription four folds. Desire to synthesize short term benefits and over optimism among the retail investors, has led to such increase. We summarize that in the post pandemic era, higher than usual listing gains and larger than usual issue sizes are affected by a radical shift in Indian retail investor behaviour. Tail events like COVID-19 have changed the way Indian investors behave and invest in IPO’s causing them to base their decisions on speculative metrics rather than the actual fundamentals of the issue. This article is a first-of-its-kind study to examine the impact of the pandemic on the equity market practices in India, namely, the anomaly of underpricing of IPOs or new listings on the main board segment.
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