Does the Nature of Index and Liquidity Influence the Mispricing in Future Contracts in India?

In this study, we investigate the variations in the mispricing of futures in Nifty (benchmark index), Bank Nifty and Nifty IT. Using a regression model on 1230 observations for the period of 1 January 2014 to 31 December 2018, we find no significant mispricing exists in the last week to the expiry of the contract in all three indices. This finding supports the existing literature that as the contract moves towards the maturity date, its value converges the market value. However, the main highlight of the paper is to reveal the difference in the life of mispricing in different indices. This difference in mispricing can be allocated to the liquidity in that indices. We report that being the most liquid, Bank Nifty is having mispricing only in 1 week (first week) of the contract, after that no significant mispricing exists in mispricing, Nifty shows significant mispricing for the first two weeks and Nifty IT shows mispricing for all weeks except last week. This is the pioneering work which considers the sectoral differences while evaluating futures mispricing. The findings of this study will provide a useful insight to the regulator and investors

Determinants of Financing Decisions of Start Up Firms

Having an optimum capital structure is crucial as it leads the company to its better operating performance. This paper examines the key determinants affecting the financing decision of start-up firms with reference to the Delhi NCR region in India by using panel data regression models. The hypotheses are formed based on theories of capital structure and existing literature. The financial information data of a final sample of 29 manufacturing start-up firms are taken into consideration for empirical analysis. The results of this research revealed that firm size, growth opportunities, profitability and liquidity are key factors significantly affecting the capital structure decision of start-up firms in India. The relationship found for firm size, profitability and liquidity supported the hypothesis of pecking order theory while growth variable results supported the hypothesis of trade-off theory. Therefore, the pecking order theory is found to be more applicable here in startup firms in India.</em

Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study

The purpose of this paper is to discuss the different determinants of productivity and profitability of banks functioning in India. The performance of public and private sector banks in terms of productivity and profitability is being assessed in two different time periods (2003-04 to 2008-09 and 2009-10 to 2013-2014). The linear programming model Data Envelopment Analysis (DEA) based Malmquist index is used to measure total factor productivity of groups and sub-group banks. The decomposition of total factor productivity into pure technical and scale efficiency is done to get a comprehensive insight of the effect of these two on the overall productivity. Further, regression analysis discovers the determinants of different bank groups. The results of the study disclose that private sector banks are more productive than public sector banks over the whole study period. But no significant difference exists in the profitability of two bank groups. The main reason of more productivity of private sector banks is the better utilization of technology than the public sector banks. Further, the productivity of banking sector of India is not found significantly different in the two sub-periods although the banks have performed better in the sub-period II (2009-10 to 2013-14)