Relative Effectiveness of Signals in IPOs in Indian Capital Markets

IPO by a firm calls for assessment of potential agency problems and associated costs by the outside investors. The potential conflict of interest problems between insiders and outsiders could be very high in countries with weak corporate governance mechanisms like India. Theoretically it could be argued that there are quite a few signals related to the firms in the IPO context and available to the investors, which could be used by them to assess the quality of firms. Based on cross-sectional data of 1243 IPOs in Indian markets during 1993-95 period, we find that the under-pricing (or realized excess returns), inside equity and pre-public offer firm reservations made for institutions and mutual funds explain the extent of oversubscription across IPOs. The type of agency appraising the project and presence or absence of foreign financial and/or technical collaborators fail to explain the extent of oversubscription across IPOs. In addition, we find that subscription rate rather than realized initial returns as dependent variable sheds more light on the effect of signals in a fixed-price open offer IPO process characterized by listing with considerable lag.

Structuring PPPs in Aviation Sector: Case of Delhi and Mumbai Airport Privatization

The concession agreement for the modernization and operation of Indira Gandhi International airport in Delhi and Chhatrapati Shivaji International airport at Mumbai respectively is referred to as Operation Management and Development Agreement (OMDA). The OMDA was a part of a set of transaction documents along with the request for proposal provided to potential bidders. The OMDA laid out the contractual terms for structuring the PPP. This paper discusses the evolution of the draft OMDA from when it was first released in April 2005 to the bidders till it was released as a final OMDA in August 2005 before an extended bidding date. During this period, some of the critical issues addressed were: limits to commercial development of airport land, nature of tariff regulatory regime, contingent liabilities including performance bonds and termination payments, and potential contractual and strategic conflicts. It brings out the intra-governmental issues and processes, and the significant learning that formed part of these PPP concessions, which could well be among the largest in the world.

Introducing Competition in Container Movement by Rail

Container movement by rail was a monopoly of Indian Railways (IR) until recently and its subsidiary, Container Corporation (CONCOR) was the sole operator of container trains. Entry of other entities in 2007 has been driven by larger public policy concerns. In the process, issues such as resistance of the incumbent, erection of entry barriers, denial of level playing field, use of a closely held organization as a consultant, and conflicting roles of IR as licensor, regulator, service provider, and operator came into sharp focus. This paper attempts to review the process starting from the policy announcement (February 2005) to evolution of a Model Concession Agreement (January 2007) and shows how policies were influenced by the incumbent to restrict competition by creating barriers on the one hand and how an alternate view provided by external entities, like the Planning Commission and other non-IR stakeholders significantly altered the course of action leading to entry of a large number of competing players.

Energy Injection Episodes in Gamma Ray Bursts: The Light Curves and Polarization Properties of GRB 021004

Several GRB afterglow light curves deviate strongly from the power law decay observed in most bursts. We show that these variations can be accounted for by including refreshed shocks in the standard fireball model previously used to interpret the overall afterglow behavior. As an example we consider GRB 021004 that exhibited strong light curve variations and has a reasonably well time-resolved polarimetry. We show that the light curves in the R-band, X-rays and in the radio can be accounted for by four energy injection episodes in addition to the initial event. The polarization variations are shown to be a consequence of the injections.Comment: 4 pages, 2 figures. To appear in ApJ

Primordial magnetic field limits from cosmological data

We study limits on a primordial magnetic field arising from cosmological data, including that from big bang nucleosynthesis, cosmic microwave background polarization plane Faraday rotation limits, and large-scale structure formation. We show that the physically-relevant quantity is the value of the effective magnetic field, and limits on it are independent of how the magnetic field was generated.Comment: 7 pages, 6 figure