Vandana Bhama | Fortune Institute of International Business (original) (raw)

Papers by Vandana Bhama

Research paper thumbnail of Understanding equity repurchase motives for different firm set-up: Indian evidence

Investment Management and Financial Innovations, 2021

Corporates express their intention to reward shareholders during repurchase announcements by maxi... more Corporates express their intention to reward shareholders during repurchase announcements by maximizing their wealth. However, most empirical research finds that stocks’ performance is poor when repurchase announcements are made, and there are no significant abnormal returns. In the Indian context, the present study examines firms’ real intention behind repurchase decisions. The sample comprises 132 firms listed on the Bombay Stock Exchange (BSE) from 2012 to 2018. A Tobit regression model has been used on different firm set-up. The empirical results reveal that low stock valuation is the prominent reason for buybacks among corporates. Firms prefer repurchases to provide abnormal returns to the investors; however, the Indian market does not react much positively to the repurchases, and this might be the reason for less encouraging buybacks in the Indian market. Further, the tender offer is the most preferred mode to open market repurchases. In the case of service firms, undervaluati...

Research paper thumbnail of Macroeconomic variables, COVID-19 and the Indian stock market performance

Investment Management and Financial Innovations

India witnessed the first major wave of COVID-19 in 2020. The second major wave during April 2021... more India witnessed the first major wave of COVID-19 in 2020. The second major wave during April 2021 caused a higher number of infected cases across the country. These waves of COVID-19, rising cases and lockdown announcements severely impacted the Indian economy. Moreover, huge volatility was observed in the prices of oil and exchange rates during the similar period. Thus, this study tests the effect of selected macroeconomic variables and the COVID-19 pandemic on the performance of the Indian stock market. Using co-integration and the vector error correction model on the NIFTY 100 firms, the findings suggest co-integration and long-term association among variables. The Indian stock market experienced an inverse connection with the exchange rate volatility; the coefficient value is 57.582. The exchange rates rose heavily (with a value of Indian rupee being 76.95 against US dollar) with the onset of COVID-19 cases. Further, these cases do hurt the sentiments of the stock market; howeve...

Research paper thumbnail of Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

Asian Journal of Business and Accounting

Manuscript type: Research paper Research aims: This study examines firms' adherence to the peckin... more Manuscript type: Research paper Research aims: This study examines firms' adherence to the pecking order in deficit and surplus situations by comparing firms in India and China. It also examines the extent of debt issues and redemption when the deficits and surpluses are relatively large in amount. Design/Methodology/Approach: This study analyses the data of the Bombay Stock Exchange (BSE) 500 index and the Shanghai Stock Exchange (SSE) 380 index firms. It uses Ordinary Least Square (OLS) regression to examine the effect of deficit and surplus on debt issuance and redemption. Research findings: The findings indicate that deficit firms in India as well as China adhere to the pecking order by issuing large amounts of debt. The debt issues (short-term debt) are exceptionally higher among Chinese firms whereas Indian firms issue more longterm debts. In addition, Chinese firms prefer to utilise new funds to redeem the existing debts because most of their debts are short term whereas Indian firms use a major chunk of their proceeds to finance deficits. Chinese surplus firms do not retain sizeable funds, an overwhelming proportion of these funds is used to redeem their existing short-term debts. In contrast, Indian surplus firms are

Research paper thumbnail of Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

Asian Journal of Business and Accounting, Dec 24, 2018

Manuscript type: Research paper Research aims: This study examines firms' adherence to the peckin... more Manuscript type: Research paper Research aims: This study examines firms' adherence to the pecking order in deficit and surplus situations by comparing firms in India and China. It also examines the extent of debt issues and redemption when the deficits and surpluses are relatively large in amount. Design/Methodology/Approach: This study analyses the data of the Bombay Stock Exchange (BSE) 500 index and the Shanghai Stock Exchange (SSE) 380 index firms. It uses Ordinary Least Square (OLS) regression to examine the effect of deficit and surplus on debt issuance and redemption. Research findings: The findings indicate that deficit firms in India as well as China adhere to the pecking order by issuing large amounts of debt. The debt issues (short-term debt) are exceptionally higher among Chinese firms whereas Indian firms issue more longterm debts. In addition, Chinese firms prefer to utilise new funds to redeem the existing debts because most of their debts are short term whereas Indian firms use a major chunk of their proceeds to finance deficits. Chinese surplus firms do not retain sizeable funds, an overwhelming proportion of these funds is used to redeem their existing short-term debts. In contrast, Indian surplus firms are

Research paper thumbnail of Does firms' pecking order vary during large deficits and surpluses? An empirical study on emerging economies

The present study examines firms (of India and China) with normal as well as large deficits and s... more The present study examines firms (of India and China) with normal as well as large deficits and surpluses. Using an extended model of pecking order theory, the study indicates that Indian and Chinese firms frequently issue debt when have normal deficits. Surprisingly during normal deficiencies, Chinese firms retire debt more frequently visa -vis Indian firms due to more reliance on short-term debt. The pecking order results are less supportive for Indian firms with large deficits due to high debt ratios that constrain firms not to issue more debt. In marked contrast, the results are robust for Chinese firms. Firms continue to raise substantial debt even in the situation of high debt ratios. In a surplus situation (with normal surpluses), Indian firms utilise surpluses as well as new debt proceeds to a partial extent to payback existing debt obligations to reduce their debt levels. In contrast, the results are excellent in favour of Chinese firms. During large surplus conditions, the results are extremely poor for Indian firms but weak for Chinese firms. Indian firms retain surpluses and new debt issues for future investment needs. In marked contrast, Chinese firms retain up to 40 per cent of their funds.

Research paper thumbnail of Understanding equity repurchase motives for different firm set-up: Indian evidence

Investment Management and Financial Innovations, 2021

Corporates express their intention to reward shareholders during repurchase announcements by maxi... more Corporates express their intention to reward shareholders during repurchase announcements by maximizing their wealth. However, most empirical research finds that stocks’ performance is poor when repurchase announcements are made, and there are no significant abnormal returns. In the Indian context, the present study examines firms’ real intention behind repurchase decisions. The sample comprises 132 firms listed on the Bombay Stock Exchange (BSE) from 2012 to 2018. A Tobit regression model has been used on different firm set-up. The empirical results reveal that low stock valuation is the prominent reason for buybacks among corporates. Firms prefer repurchases to provide abnormal returns to the investors; however, the Indian market does not react much positively to the repurchases, and this might be the reason for less encouraging buybacks in the Indian market. Further, the tender offer is the most preferred mode to open market repurchases. In the case of service firms, undervaluati...

Research paper thumbnail of Macroeconomic variables, COVID-19 and the Indian stock market performance

Investment Management and Financial Innovations

India witnessed the first major wave of COVID-19 in 2020. The second major wave during April 2021... more India witnessed the first major wave of COVID-19 in 2020. The second major wave during April 2021 caused a higher number of infected cases across the country. These waves of COVID-19, rising cases and lockdown announcements severely impacted the Indian economy. Moreover, huge volatility was observed in the prices of oil and exchange rates during the similar period. Thus, this study tests the effect of selected macroeconomic variables and the COVID-19 pandemic on the performance of the Indian stock market. Using co-integration and the vector error correction model on the NIFTY 100 firms, the findings suggest co-integration and long-term association among variables. The Indian stock market experienced an inverse connection with the exchange rate volatility; the coefficient value is 57.582. The exchange rates rose heavily (with a value of Indian rupee being 76.95 against US dollar) with the onset of COVID-19 cases. Further, these cases do hurt the sentiments of the stock market; howeve...

Research paper thumbnail of Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

Asian Journal of Business and Accounting

Manuscript type: Research paper Research aims: This study examines firms' adherence to the peckin... more Manuscript type: Research paper Research aims: This study examines firms' adherence to the pecking order in deficit and surplus situations by comparing firms in India and China. It also examines the extent of debt issues and redemption when the deficits and surpluses are relatively large in amount. Design/Methodology/Approach: This study analyses the data of the Bombay Stock Exchange (BSE) 500 index and the Shanghai Stock Exchange (SSE) 380 index firms. It uses Ordinary Least Square (OLS) regression to examine the effect of deficit and surplus on debt issuance and redemption. Research findings: The findings indicate that deficit firms in India as well as China adhere to the pecking order by issuing large amounts of debt. The debt issues (short-term debt) are exceptionally higher among Chinese firms whereas Indian firms issue more longterm debts. In addition, Chinese firms prefer to utilise new funds to redeem the existing debts because most of their debts are short term whereas Indian firms use a major chunk of their proceeds to finance deficits. Chinese surplus firms do not retain sizeable funds, an overwhelming proportion of these funds is used to redeem their existing short-term debts. In contrast, Indian surplus firms are

Research paper thumbnail of Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

Asian Journal of Business and Accounting, Dec 24, 2018

Manuscript type: Research paper Research aims: This study examines firms' adherence to the peckin... more Manuscript type: Research paper Research aims: This study examines firms' adherence to the pecking order in deficit and surplus situations by comparing firms in India and China. It also examines the extent of debt issues and redemption when the deficits and surpluses are relatively large in amount. Design/Methodology/Approach: This study analyses the data of the Bombay Stock Exchange (BSE) 500 index and the Shanghai Stock Exchange (SSE) 380 index firms. It uses Ordinary Least Square (OLS) regression to examine the effect of deficit and surplus on debt issuance and redemption. Research findings: The findings indicate that deficit firms in India as well as China adhere to the pecking order by issuing large amounts of debt. The debt issues (short-term debt) are exceptionally higher among Chinese firms whereas Indian firms issue more longterm debts. In addition, Chinese firms prefer to utilise new funds to redeem the existing debts because most of their debts are short term whereas Indian firms use a major chunk of their proceeds to finance deficits. Chinese surplus firms do not retain sizeable funds, an overwhelming proportion of these funds is used to redeem their existing short-term debts. In contrast, Indian surplus firms are

Research paper thumbnail of Does firms' pecking order vary during large deficits and surpluses? An empirical study on emerging economies

The present study examines firms (of India and China) with normal as well as large deficits and s... more The present study examines firms (of India and China) with normal as well as large deficits and surpluses. Using an extended model of pecking order theory, the study indicates that Indian and Chinese firms frequently issue debt when have normal deficits. Surprisingly during normal deficiencies, Chinese firms retire debt more frequently visa -vis Indian firms due to more reliance on short-term debt. The pecking order results are less supportive for Indian firms with large deficits due to high debt ratios that constrain firms not to issue more debt. In marked contrast, the results are robust for Chinese firms. Firms continue to raise substantial debt even in the situation of high debt ratios. In a surplus situation (with normal surpluses), Indian firms utilise surpluses as well as new debt proceeds to a partial extent to payback existing debt obligations to reduce their debt levels. In contrast, the results are excellent in favour of Chinese firms. During large surplus conditions, the results are extremely poor for Indian firms but weak for Chinese firms. Indian firms retain surpluses and new debt issues for future investment needs. In marked contrast, Chinese firms retain up to 40 per cent of their funds.