The Effect of CEO Duality on IPO Underpricing in India: A Comprehensive Review

Abstract

This paper reviews the literature on the relationship between CEO duality and Initial Public Offering (IPO) underpricing in the Indian context. CEO duality, where the Chief Executive Officer also serves as the Chairman of the Board, represents a significant corporate governance structure that may influence investor perceptions and pricing decisions during IPOs. While IPO underpricing—the phenomenon where shares are offered below their market value on the first trading day—has been extensively studied globally, the specific role of CEO duality in Indian IPOs remains an area requiring deeper investigation. This review synthesizes theoretical frameworks including agency theory, signaling theory, and resource dependence theory, examines empirical evidence from Indian and international markets, and identifies gaps in the current literature. The review concludes that CEO duality's effect on IPO underpricing in India is contextually nuanced, influenced by institutional factors, market conditions, and investor sentiment unique to emerging markets.