Underwriter network centrality and IPO outcomes: evidence from India

Purpose An initial public offering (IPO) is a process in which a company sells its shares to the public for the first time. This study examines whether underwriter network centrality influences key outcomes of an IPO process, including investor participation, pricing, secondary sales, and the post-IPO analyst following. Design/methodology/approach First, we apply network analysis to measure underwriter network centrality. Then, we use multivariate regression models for hypotheses testing. Additionally, we employ matched-company analysis and two-stage least squares for robustness. Findings Higher network centrality leads to increased investor participation, higher analyst following, greater underpricing and increased intensity of secondary sales by pre-IPO investors. Practical implications Issuers can better assess lead manager selection, investors can incorporate network signals in entry/exit decisions, and regulators can better monitor concentration and market power in underwriting. Originality/value The study extends the IPO literature by documenting the role of underwriter network in IPO lifecycle, with novel evidence from the two-stage bidding and secondary sale outcomes in an Indian setting.