Abstract
We compare the IPO issuing firms in India that disclose risk in their advertisements with the firms that do not disclose such risks and find 31% higher underpricing in firms that disclose risk. For the risk disclosing firms, we find a significantly higher subscription from institutional investors. The difference in the subscription from retail investors for the two groups of firms is insignificant. The firms that disclose risk in their ads have superior performance in the post IPO period as compared to the firms that do not disclose such risk.
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