A Study on Impact of Dividend Policy on Initial Public Offering Price Performance

TL;DR

This paper investigates whether dividend policy influences IPO performance in India from 2011 to 2014, finding no significant effect on IPO stock prices using statistical and GARCH models.

Contribution

It provides empirical evidence on the impact of dividend policy on IPO performance in the Indian market, employing advanced econometric methods.

Findings

Dividend policy has no significant effect on IPO stock prices.

Long-run performance of IPOs is unaffected by dividend decisions.

Uses GARCH model and performance statistics for analysis.

Abstract

This study examines the impact of dividend policy on the performance of initial public offerings in India. The period of study is from the year 2011-2014. Monthly returns of the IPOs issued in the considered period and the Indian Stock Market Index (Nifty 50) were considered for the long-run performance study. The methodological tools used are long-run performance statistics and the GARCH model. The Dummy variable was used to measure the effect of dividends on the IPOs. The study reveals that the dividend policy has no significant effect on the stock prices of IPO.