Title: Risk factor disclosure pattern of Indian initial public offering prospectuses: a content analysis

Authors: Krishan Lal Grover; Pritpal Singh Bhullar

Addresses: University Business School, Maharaja Ranjit Singh Punjab Technical University Bathinda, India ' University Business School, Maharaja Ranjit Singh Punjab Technical University Bathinda, India

Abstract: This study explores the existing patterns of risk factor disclosure in India's initial public offering prospectuses. The risk factors section of the 131 prospectuses of the Indian IPOs listed on the NSE mainboard from 2011 to 2019 will be examined through content analysis. The Flesch reading ease score (FRES) test is applied to know the readability index of the risk factor section of each sample prospectus. The findings reveal companies place greater emphasis on disclosure of internal risk factors than the other two risk categories. It also discovers overlapping risk statements across categories of internal risk, external risk, and offer-related risk factors in the IPO prospectus. This study underscores the need for mutually exclusive risk categories that give investors a better understanding of the risks associated with IPOs.

Keywords: IPO prospectus; risk factors disclosures; content analysis; risk categories.

DOI: 10.1504/IJEF.2022.120355

International Journal of Electronic Finance, 2022 Vol.11 No.1, pp.1 - 15

Received: 10 Jul 2021
Accepted: 21 Aug 2021
Published online: 17 Jan 2022 *

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