Purpose

This study investigates the impact of pre-IPO earnings management on investor demand in the Indian IPO market. It also examines whether earnings management by issuer firms affects IPO valuation, a topic that is underexplored in accounting research.

Design/methodology/approach

The study uses the data of 310 IPOs from India during the period 2000–2021. The association between pre-IPO earnings management with investor demand and valuation is tested using cross-sectional ordinary least squares regression models with heteroscedasticity-robust standard errors.

Findings

The study finds that the degree of pre-IPO earnings management impacts retail investor demand, measured as their over-subscription multiple. Pre-IPO earnings management is unrelated to institutional investor bidding. Further, this paper suggests no relation between pre-IPO earnings management and IPO valuation.

Research limitations/implications

Future studies could explore various other forms of earnings management and their impact on investor demand and valuation.

Practical implications

The findings of this study will help the investors and regulators to understand the practice of earnings management among IPO firms and how it is related to IPO demand and valuation.

Originality/value

This study contributes to the existing literature on IPO-earnings management and investor demand by documenting that issuer firms engage in earnings management to influence investor demand, particularly retail investor demand. Analysis of IPO valuation reveals that earnings management is mostly unrelated to IPO valuation, contrary to the general perception in the literature.

中文翻译：

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散户和机构投资者对盈余管理的反应是否不同？来自印度首次公开募股的证据

目的

本研究调查了印度 IPO 市场上市前盈余管理对投资者需求的影响。它还研究了发行人公司的盈余管理是否影响 IPO 估值，这是会计研究中尚未充分探讨的话题。

设计/方法论/途径

该研究使用了 2000 年至 2021 年期间印度 310 起 IPO 的数据。使用具有异方差稳健标准误的横截面普通最小二乘回归模型来测试首次公开募股前盈余管理与投资者需求和估值之间的关联。

发现

研究发现，首次公开募股前的盈余管理程度会影响散户投资者的需求，以超额认购倍数来衡量。IPO前盈余管理与机构投资者竞价无关。此外，本文表明 IPO 前盈余管理与 IPO 估值之间没有关系。

研究局限性/影响

未来的研究可以探索各种其他形式的盈余管理及其对投资者需求和估值的影响。

实际影响

本研究的结果将帮助投资者和监管机构了解IPO公司的盈余管理实践以及其与IPO需求和估值的关系。

原创性/价值

本研究通过记录发行人公司参与盈余管理来影响投资者需求，特别是散户投资者需求，为有关 IPO 盈余管理和投资者需求的现有文献做出了贡献。对IPO估值的分析表明，盈余管理大多与IPO估值无关，这与文献中的普遍看法相反。