Market reaction to share pledges: Evidence from India

Bang, N P and Sonti, R and Thirumalai, R S Market reaction to share pledges: Evidence from India. Working Paper. Indian School of Business. (Unpublished)

Full text not available from this repository. (Request a copy)

Abstract

For a sample of share pledges by promoters in India, we examine equity market reactions around pledging event dates. Consistent with market folklore, in the univariate case, we find that markets react negatively to share pledges. However, in a multivariate setting, we find that the markets react positively on average and that the negative reaction is driven by other factors related to the share pledge like promoter characteristics and the stated reason for the pledge. Conversely, we find weak evidence of negative market reaction to the revoking of share pledges. This is contrary to expectations as revoking a pledge is likely to indicate positive information about the promoter’s ability to repay the loan.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
ORCiD
Bang, N P
UNSPECIFIED
Sonti, R
https://orcid.org/0000-0001-7540-4243
Thirumalai, R S
http://orcid.org/0000-0001-9251-6829
Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Evidence, Share pledges
Subjects: Finance
Depositing User: Ilayaraja M
Date Deposited: 21 Jun 2019 19:59
Last Modified: 21 Jun 2019 19:59
URI: http://eprints.exchange.isb.edu/id/eprint/1161
Publisher URL: https://www.isb.edu/research/working-papers/market...
Related URLs:

Actions (login required)

View Item View Item
Statistics for DESI ePrint 1161 Statistics for this ePrint Item