Volume 6 •  Number  2  •  February 2012

IPO Volatility In Indian Markets

Raising money by offering Initial Public Offering (IPO) has proven to be an effective mechanism for firms. A firm with the help of underwriters fix the issue price usually, ‘leaving enough on the table’. This IPO underpricing has been well documented by various researchers across the globe, including the authors, in the Indian context. This phenomenon and the absence of any trading history make it difficult to determine the fair price of the stock. In case of markets being fully efficient, the listing price should reflect the fair value, and the price should be fairly stable after that. The authors challenge the notion of existence of strong form of efficiency in the Indian markets by providing empirical evidences on volatility and volume trading. To reduce this volatility, the authors have proposed several mechanisms such as use of anchor investors, price band on listing day, strengthening derivatives market and alternative method to book building in determining issue price.
Keywords : IPO volatility, underpricing, market efficiency, steps to reduce price volatility

References
1) Allen F and Faulhaber G. (1989): “Signalling by underpricing in the IPO market” Journal of Financial Economics; 23, pp. 303-23.
2) Anchor investors fail to fire up IPO market, accessed on 12 December 2010, http://articles.economictimes.indiatimes.com/2009-12-26/news/27653994_1_anchor-investors-investors-in-public-issues-qibs
3) Bandivadekar S and Ghosh S (2003), “Derivatives and volatility on Indian Stock Markets”, Reserve Bank of India Occasional Papers, Vol. 24, No. 3, pp. 1-4.
4) Baron D. (1982), “A model of the demand of investment banking advising and distribution services for new issues”, Journal of Finance, Volume 37, Issue 4, pp. 955-976.
5) Coal India IPO finds no takers, accessed on 4 December 2010, http://www.onemint.com/2010/10/18/coal-india-ipo-subscription-numbers/
6) Curran P J, West S G and Finch J F (1996), “The robustness of test statistics to nonnormality and specification error in confirmatory factor analysis”, Psychological Methods, 1, pp.16-29.
7) Ljungqvist, A. P., Jenkinson, T., Wilhelm, W. J., (2000), “Has the Introduction of Bookbuilding Increased the Efficieny of International IPOs”, working paper, pp. 1-57.
8) Madhusoodanan, T. P. and Thiripalraju M. (1997): “Underpricing in initial public offerings: The Indian evidence”, Vikalpa : The Journal For Decision Makers, 22, pp. 17-30.
9) Miller, Edward M., (1977), “Risk, Uncertainty, and Divergence of Opinion”, Journal of Finance , Volume 32, Issue 4, pp. 1151-1168.
10) Raju M T and K Karande (2003): “Price Discovery and Voltatility on NSE Futures Market” SEBI Bulletin, Volume 1, Issue 3, pp. 5-15.
11) Rock , Kevin (1986): “Why new issues are underpriced”, Journal of Financial Economics; 15, pp. 186-212.
12) SEBI mulls price band on IPO listing day, accessed on 5 December 2010,
http://www.hinduonnet.com/2008/01/18/stories/2008011853811900.htm
13) Shah, Ajay (1995): “The Indian IPO market: Empirical facts. technical report”, Centre for Monitoring Indian Economy, Mimeo, pp. 1-29.
14) Thenmozhi M (2002): “Futures Trading, Information and Spot Price Volatility of NSE-50 Index Futures Contract”, NSE Research Initiative, Paper no. 18, pp. 2-4.
15) Who are anchor investors?, accessed on 10 December 2010, http://sify.com/finance/who-are-anchor-investors-news-editors-picks-jj1lvIgcbah.html

Yash Bansal
Student of MS in Financial Engineering
Columbia University, New York,
USA.
ybansal31@gmail.com

Anand N. Desai
Manager, Human Resources,
Reliance Industries Limited
Mumbai.
danand555@gmail.com

This paper examines the Islamic Banking system on a domestic level in comparison to the global level as well as compares the same to the conventional banking system. A well-developed banking system is a pre-requisite for the smooth and effective functioning of an economy. The basic task of any banking organization is it to mobilize savings from the investors’ community and channel these savings to high – yielding projects. The fundamentals of most banks in the world are based on interest charged on loans and interest paid on deposits. Islamic banking is based on Islam’s Shariah principles, according to those principles, interest (Ribah) in any form is unlawful and a borrower must not bear all the risks/ cost of a failure, resulting in a balanced distribution of income and not allowing the lender to monopolize the economy. Hence, Islamic Banking operates without charging or paying interest. India is still in the front line for attracting placements and investments from abroad, and the Muslim dominated Middle East countries are having excess funds and are looking for suitable investment opportunities; this is the precise time to understand and adopt this emerging mode of banking known as Islamic Banking and to analyze its prospects in India. However, the present rules and regulations prohibit this banking system from entering and setting base in India. The authors have suggested a universally accepted legal frame work for introducing the same in India, after research on the past, present and existing regulatory models and market scenario.

References
1. Atif Reza Khan ( 2005) , “Training Islamic Bankers: Back To Basics On Islamic Finance For The Uninitiated”, Euromoney Books, 2005, ISBN 1-85564-921-7.
2. 'Friends and Rivals', The Economist, 13 September 2007.
3. HSBC Amanah 2007 http://www.hsbcamanah.com/ accessed on 30 June 2011.
4. Islamic Finance overview- Grail Research, Institute Of Banking Studies http://www.grailresearch.com/pdf/ContenPodsPdf/Islamic_Finance_Overview.pdf accessed on 30 June 2011.
5. 'Let Us Embrace Islamic Banking', The Sunday India, 10th, January 2010.
6. S&P Islamic Finance Outlook 2009.
7. Sachar Committee Report on Indian Muslims.
8. Shariq Nisar and Mohsin Aziz (2004), “Islamic Non Banking Financial Institutions in India: Special Focus On Regulation” proceedings of the seminar on Non Bank Financial Institutions : Islamic Alternatives , Kuala Lumpur, 1st- 3rd March 2004. http://www.philadelphia.edu.jo/courses/Markets/Files/Markets/90028.pdf accessed on 30 June 2011.
9.www.hm.treasury.gov.uk./newsroom_and_speeches/speeches/
econsecspeeches/speech_est_290307.cfm accessed on 30 June 2011.
10.www.hm.treasury.gov.uk./newsroom_and_speeches/speeches/
econsecspeeches/speech_est_300107.cfm accessed on 30 June 2011.
11.www.ifsb.org/view.php?ch=4&pg=261&ac=26&fnames=file
&dbindex=0&ex=1193769943&md=%7C%82%85%96D%C6%DE%
E9U%83o%A7%BD%A1%F5. accessed on 30 June 2011.
12. www.investmentsandincome.com › Banks and Banking - Cached - Similar accessed on 30 June 2011.
13. www.imf.org/external /pubs/ft/fandd/2005/12/qorchi.htm. accessed on 30 June 2011.
14. www.islamic-banking.com/ibanking/whatib.php accessed on 30 June 2011.

Dr. A. Pandu
Assistant Professor in Commerce
Pondicherry University Community College,Lawspet, Puducherry
alangayampandu@gmail.com

Dr. Mohammed Galib Hussain
Research Supervisor
Emeritus Professor
Islamiah College
Vaniyambadi
Vellore District,Tamil Nadu
drmdghalib@yahoo.com

The study examined the Macroeconomic Determinants of Stock Price Behavior in the Nigerian stock market. The objective was to determine whether selected macroeconomic variables, interest rate, inflation rate, and exchange rate affect stock price movements. Unit root test was conducted to test for Stationarity as well as to determine the degree of integration. Research data were analyzed first, by using the Ordinary least Squares Method. However, with a calculated Durbin-Watson Statistic of 0.20665, it was evident that the stochastic error terms were auto correlated, thus indicating that the results of the Ordinary least square test are spurious. This necessitated some adjustment to correct the presence of the auto correlation of the stochastic error terms; this was done using Cochran-Orcutt autoregressive model of order 2 AR (2). The results of the study showed that some macroeconomic variables significantly affect stock price movements and thus affect the stability of the Nigerian Capital Market.

Key words: Investment, Macroeconomic Variables, Stock Price Changes.

References
1) Al-Faki, M. (2006). “The Capital Market and Socio-economic Development,” a paper presented at the 3rd Distinguished Faculty of Social Sciences Public Lecture series at the University of Benin Main Auditorium, June.
2) Amadi, S.N. and Odubo, T.D, (2000). “Macroeconomic Variables and Stock Prices: Causality Analysis,” The Nigerian Journal for Economics and Management Studies, Volume 4, Issues 1&2 , pp. 29-41.
3) Campbell, J.Y. (1991). “Stock Returns and the Term Structure,” Journal of Financial Economics, Volume 18, pp. 3 - 37.
4) Dauda, H. (2006). “Capital Market Operators and their Functions,” a paper presented at a Public Enlightenment Workshop on Opportunities in the Nigerian Capital Market for Industrial Development of Ekiti State of Nigeria and Teachers Forum.
5) Ferguson, R.W. (2005). “Asset Price Levels and Volatility,” Federal Reserve Board, accessed on January 6, 2011; file://F://FRB_Speech.Ferguson-AssetpriceLevelsandVolatility.
6) Fisher, D.E. and Jordan, R.J. (2005). Security Analysis and Portfolio Management, Pearson Education, Delhi.
7) Glosten, I.R., Jagannathan, R., and Runkle, D.E. (1993), “On The Relation Between The Expected Value And The Volatility Of The Nominal Excess Return On Stocks,” Journal of Finance, Volume 48, Issue 5, pp. 1779 - 1801.
8) Heman, S.C. (2001). “Security Management and the Validity of Portfolio Market Theories,” An Unpublished MBA project submitted to the Department of Business Administration, Lagos State University, Nigeria.
9) Inegbedion, H.E. (2008). “Efficient Market Hypothesis and the Nigerian Capital Market,” An Unpublished M Sc. Thesis Submitted to the University of Benin, Nigeria.
10) N'dri, K.L. (2008). “The Effects of Interest Rate Volatility on Stock Returns and Volatility: Evidence from Korea,” International Research Journal of Economics, Volume 14, pp. 275-290.
11) Oaikhena, H.E. (2003). “The Impact of Economic Reform on the Behaviour of Stock Prices: Empirical Evidence from the Nigerian Stock Market,” The Indian Journal of Economics, Volume 83, No. 330, pp. 287-304.
12) Odife, D.O. (2002). “Changing Trends in Stock Exchange and Capital Market Development: Lessons for Africa”, accessed on November 6, 2008; http://www.unitar.org.dfm.resource_centre.document.
13) Osaze, B.E. (2000), Nigerian Capital Market in the African and Global Financial System. Benin City, Bofic Consulting Group Limited.
14) Sangeeta, C. (2007). “Stock Market and Macroeconomic Behaviour in India” , accessed on November 11, 2008; http://www.legindia.org.
15) Shanken, J. (1990), “Inter-temporal Asset Pricing,” Journal of Econometrics, Volume 45, pp. 99-120.
16) Udegbunam, R.I. and Oaikhena, H.E. (2002). “Fiscal Deficits, Money Stock Growth and the Behaviour of Stock Prices in Nigeria: An Empirical Investigation,” Journal of Financial Management and Analysis, Volume 4, Issues 1&2, pp. 10 - 27.
17) Wikipedia (2007). “Efficient Market Hypothesis” , accessed on January 16, 2011,
http://enwikipedia.org_wiki.efficientmarkethypothesis.

Henry Egbezien Inegbedion
Ph. D Student
Department Of Business Administration
University Of Benin, Benin City
Nigeria.
henryegbezien@yahoo.co.uk
 

Dr. Reddy’s Liquidity Management and Trade-Off between Liquidity, Risk and Profitability: An Empirical Study

The study is based on different measures to assess the qualitative efficiency of liquidity management and trade-off between liquidity, risk and profitability. There was a negative association between liquidity and profitability. It reflects the unfavorable effect of liquidity on profitability. The negative correlation between risk and profitability reflects the unfavorable effect of risk and profitability. It reveals that the overall performance regarding liquidity management at Dr.Reddy’s was very good from the creditor’s point of view, but according to the management’s point of view, it reflects bad financial planning and inefficient tie up of liquid funds. The company maintained an excess in relation to total assets was also high. However, it showed greater efficiency both in working capital turnover and in the realization of receivables. It indicates that the high degree of conservative policy adopted by the company has made a negative impact on its profitability.

References
1) Dr. N. S Nagarajan and Dr. K. Kaliyaperumal ( 2008) , Research Methodology, First Edition, SKM Publications.
2) Dr. S. Shajahan (2009), Research Methods for Management, Third Edition, Jaico Publishing House, Mumbai.
3) Murthy (2010), First Edition, Financial Management, Margham Publications, Chennai , p.5.8, pp. 9.1-9.100.
4) N.P. Srinivasan & M. Sakthivel Murugan ( 2006), Financial Management, Vrinda Publications ( P) Ltd., New Delhi.
5) P.K. Viswanathan, Business Statistics : An Applied Orientation, Pearson Education.
6) P.Mohana Rao & Alok K.Pramanik ( 2001), Working Capital Management, Deep & Deep Publications Pvt. Ltd., New Delhi.
7) Published Annual reports of Dr. Reddy's Laboratories.
8) S.N. Murthy U. Bhojanna (2007), Research Methodology, First Edition , Excel Books, New Delhi.
9) T.S.Reddy & Y.Hari Prasad Reddy, Reprint 2007, Management Accounting , Margham Publications, Chennai, pp. 3.1-3.148.

D. Sasikala
Assistant Professor,
Auxilium College for Women,
Vellore, Tamil Nadu.
 sasidaya@yahoo.co.in

Determinants of Bank’s Profitability: Evidence from Bangladesh

This empirical study was conducted on randomly selected six commercial banks of Bangladesh. This study uses widely used determinants of banks’ profitabilities, which are ROA, ROE and ROD and these are also commonly used criterion of Bangladesh Bank to evaluate banks’ performance. In addition, this study evaluates the efficiency ratio, asset utilization ratio, asset size and ROD as a determinant of banks’ profitability measured by ROA. The results of the financial indicators reveal that the Prime Bank is considered to be out performing in terms of total assets, whereas Arab Bangladesh Bank is showing soaring performance in terms of profitability. The results of regression analysis found the explanatory variables - operational efficiency, asset size and ROD to be positively related and asset utilization to be negatively related to ROA, but these associations are statistically insignificant.
Keywords: Profitability, Determinants, Bank, Dupont Analysis

References
1) Allen, L. and Rai, A. (1996). “Operational Efficiency in Banking: An International Comparison”, Journal of Banking and Finance, Volume 20, pp. 655-672.
2) Bobáková, I.V. (2003). “Raising the Profitability of Commercial Banks”, BIATEC, 11, pp. 21-25.
3) Berger, A. (1995). “The Profit Structure Relationship in Banking: Tests of Market-Power and Efficient-Structure Hypotheses”, Journal of Money, Credit and Banking, Volume 27, pp. 404-431.
4) Bashir, A.M. (2000). “Assessing the Performance of Islamic Banks: Some Evidence from the Middle East”, Grambling State University, Mimeo.
5) Banking Sector Performance. Regulation and Bank Supervision Report (2010), Bangladesh Bank.
6) Clark.T., Dick, A.A., Hitle. B., Strioh, K.J., and William, R. (2007). “The Role of Retail Banking in the U.S. Banking Industry: Risk, Return, and Industry Structure”, Economic Policy Review. Volume 13, Issue 3.
7) Fraser, D. R., Philips, W. and Rose, P.S. (1974). “Determinants of Profits and Profitability of Publics Sectors in India: A Profit Function Approach”, Journal of Financial Management and Analysis, Volume 14, Issue 1, pp.27-37.
8) Fries, S., Neven, D. and Seabright, P. (2002). “Bank Performance in Transition Economies”, European Bank for Reconstruction and Development Working Paper.
9) Guru B., J. Staunton and B. Balashanmugam (2002). “Determinants of Commercial Bank Profitability in Malaysia”, University Multimedia Working Papers.
10) Hays, F.H., DeLurgio, S.A. and Gilbert, A.H.(2009). “Concentration, the Internet and Pricing of Bank Assets and Liabilities”, Research in Business and Economics Journal, Volume 1.
11) Haslem, J.A. (1968). “A Statistical Analysis of the Relative Profitability of Commercial Banks”, Journal of Finance, Volume 23, pp.167-176.
12) Haron, S. (2004). “Determinants of Islamic Bank Profitability”, Global Journal of Finance and Economics , Volume 1.
13) Hester, D.D. and Zoellner, J. F. (1966). “The Relation between Bank portfolios and Earnings: An Econometric Analysis”, Review of Economics and Statistics, Volume 48, pp. 372-386.
14) Holden, K. and El-Bannany, M. (2006). “Investment in Information Technology Systems and Other Determinants of Bank Profitability in the UK”, Applied Financial Economics, Volume 14, pp. 361-365.
15) Khan, A.R. (2008). Bank Management: A Fund Emphasis. Bangladesh: Decent Book House.
16) Kwan, S. and Eisenbeis, R.A. (2005). “Bank Risk, Capitalization and Inefficiency”, Center for Financial Institutions Working Papers 96-35, Wharton School Center for Financial Institutions, University of Pennsylvania.
17) Keeley, M.C. and Furlong, F.T. (1990). “A Reexamination of Mean-Variance Analysis of Bank Capital Regulation”, Journal of Banking and Finance, Volume 12, pp. 69-84.
18) Lopez, J.A. (1999). “Methods for Evaluating Value-at-risk Estimate”, SF FRB Economic Review.
19) Molyneux, P. and Thornton, J. (1992). “Determinants of European Bank Profitability: A Note”, Journal of Banking and Finance, Volume 16, pp.1173-1178.
20) Naceur, S.B. and Goaied, M. (2001). “The Determinants of the Tunisian Deposit Banks' Performance”, Applied Financial Economics, Volume 11, pp.317-319.
21) Naceur, S. B. (2003). “The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence”, Universite Libre de Tunis Working Papers.22) Peters, D., Raad, E. and Sinkey, J.F.(2004). “The Performance of Banks in Post-war Lebanon”, International Journal of Business, Volume 9, Issue 3.

Nusrat Jahan
Lecturer, School of Business
Independent University Bangladesh
mrs_ashfaque@yahoo.com

Assessing Income Generation from SHG Micro Enterprises: A Study of a Backward Region of Assam

The paper examines the level of income generation of the SHG members from their micro enterprises and attempts to identify proximate determinants of the same. The study is based on the field survey in four Development Blocks of the Karimganj District of Assam. Both NGO connected SHGs and SHGs without having any NGO connection were taken into consideration for the better understanding of the impact of NGOs on SHGs. Regression analysis is applied in identifying factors having a significant impact on income of the SHG members. It is observed that NGO connected SHG members are the most vulnerable and are at a disadvantaged position than their counterparts so far as income from their enterprises is concerned. Education has a statistically positive impact on income so also SHG member’s savings and religion. Male female disparity is also noticeable in income from micro enterprises. Poor SHG members, who have a relative edge over others in asset possession, have also performed relatively better in generating income from their enterprises. It appears that close monitoring of the group activities and providing suitable training facility is critical to materialize the benefits of Self-help Groups. NGOs need to review their actions and have a crucial role to play in making SHG projects a success.
Key Words: Microfinance, SHGs, Income Generation

References
1. Hulme, D., and Mosley, P. (1996), Finance Against Poverty, Volume 1, Routledge, London, p. 215.
2. Hulme, D., and Mosley, P. (1996), Finance Against Poverty, Volume 2, Routledge, London, p. 451.
3. Kacker, Loveleen (2006). “SHGs and Women”, Yojana, March 2006, p.73.
4. Karmakar, K.G. (1999), Rural Credit and Self-Help Group, Microfinance needs and concept in India, Sage publication, New Delhi, p. 375.
5. Manimekalai, N., and Rajaswari, G. (2000). “Empowerment of Women Through Self-Help Groups”, Margin, Volume 32, Number 4, Jul-Sep 2000, p.74.
6. Morduch, J., and Haley, B. (2001). “Analysis of the Effects of Microfinance on Poverty Reduction”, NYU Wagner Working Paper Number 1014, Issued June 28, 2002, pp. 6-83.
7. Rajasekhar, D. (2000). “Microfinance Programmes and Women's Empowerment: A Study of Two NGOs from Kerala”, Journal of Social and Economic Development, Volume 3, Number 1, January-June 2000, pp. 76-94.
8. Rajasekhar, D., and Madheswaran. S. (2005). “Economic and Social Benefits of Micro finance Programmes: An Econometric Analysis”, Journal of Social and Economic Development, January-June 2005, pp. 76-94.
9. Singh, A.K. (2007). “Functioning & Performance of Swashakti and Swayamsiddha Projects in India”, Submitted to Solidarity of the Nation Society, pp. 9-11.
10. Swaminathan, Madhura (2007). “The Microcredit Alternative?”, Economic and Political Weekly, March 31, 2007, pp. 11-71.
11. Versluvysen, Eugene (1999), Defying the Odds: Banking for the Poor, Connecticut, Kumarian Press Publication, Ottawa, Canada. pp. 41-44, pp. 224-227.

Website and Online Documentation
1) “A Study of a Micro Credit Programme run by Self-Help Groups in Tamilnadu State, India”, Journal of Finance and Management in Public Services, Volume 9, Number 2, accessed on 5th December 2010, http://cipfa.org.uk/thejournal/download/Kalaiselvi9.2.pdf
2) “District Rural Developtment Agency(D.R.D.A.)”, accessed on 23rd October 2010, http://faridkot.nic.in/citizencharterfdk.htm
3) “Does Small Dam Removal Affect Local Property Values? An Empirical Analysis”, Staff Paper Number 501, July 2006, accessed on 22nd December 2009, http://www.aae.wisc.edu/pubs/sps/pdf/stpap501.pdf.
4) “Economy and Development: Karimganj District, Assam, India”, accessed on 5th February 2009, http://karimganj.nic.in/economy.htm
5) “Estimation of Rural Poverty: A Discussion with Reference to India”, accessed on 4th April 2010, http://www.fao.org/fileadmin/templates/ess/ pages/rural/wye_city_group/ 2009/paper31chatterjee_ITALY.doc
6) “Executive Summary and Core Recommendation' report by the expert committee on rural credit”, accessed on 5th October 2009, www.nabard/org/whats/whats.htm.
7) “Micro Finance and Capacity Building”, accessed on 10th November 2009, http://www.sadhan.org/CapacityBuilding/Selfhelp%20Groups% 20as%20Financial%20Intermediaries%20in%20India.pdf.
8) “Microfinance Challenges: Empowerment or Disempowerment of the Poor?” accessed on 5th October 2010, http://www.microfinancegateway.org/gm/document 1.9.44296/ MicrofinanceChallenges%20%20empowerment%20or% 20disempowerment%20of%20poor.pdf
9) “Population and Demography: Karimganj District, Assam, India”, accessed on 5th February 2009, http://karimganj.nic.in/demo.htm
10) “Profile of Karimganj District, Assam, India”, accessed on 16th December 2009, http://gloriousindia.com/places/as/karimganj.html
11) “Significance of Income Generation Activities Under Micro-Finance: A Study of Micro-Finance Groups in Wayanand District, Kerala”, Working Paper 167, accessed on 30th September 2009, http://www.isec.ac.in/WP%20-%20167.pdf
12) “Swaran Jayanti Gram Swarozgar Yojana(SGSY)”, accessed on 30th June 2009, http://drdaganjam.nic.in/sgsy/selfhelpgroups.htm

Amith Roy
Full Time Ph.D Research Scholar,
Department of Economics,
Assam University,
Silchar,Assam.
amithroy2008@yahoo.in

Dr. Sumanash Dutta
Professor in Economics,
Department of Economics, Assam University, Silchar, Assam.
duttasu2003@yahoo.com
 

Intrinsic Value Estimation Through Fundamental Analysis : A Case Study of Dr. Reddy’s Laboratories Ltd., Hyderabad

Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices. It is a process of looking at a business at the fundamental financial level. It is a three-step examination, which calls for understanding the macro-economic environment and developments, analyzing the prospects of the industry to which the firm belongs, assessing the projected performance of the company. Company analysis for the estimation of intrinsic value can be organized in two parts (a) a study of financials, and (b) a study of other factors. However, the researchers have restricted to the study of financials only and have not focused on other factors. There are two principal methods of equity valuation, viz., the dividend discount model and the earnings multiplier model. In practice, the earnings' multiplier method is the most popular method. The key questions to be addressed in applying the earnings multiplier approach are: What is the expected EPS for the forthcoming year? What is a reasonable P/E ratio given the growth prospects, risk exposure, and other characteristics of the firm? To answer these questions, investment analysts start with a historical analysis of earnings (and dividends), growth, risk, and valuation and use this as a foundation for developing the forecasts required for estimating the intrinsic value.

References
1. Bhalla V.K. (2007), Financial Management and Policy (Text and Cases)(6th rev. ed.,), Anmol Publications Pvt. Ltd., New Delhi, pp.728-773.
2. Bhalla. V.K. (2008), Investment Management: Security Analysis and Portfolio Management (14th ed.,) S. Chand and Company Ltd., New Delhi, pp.491-524.
3. Chandrabose D. ( 2006) , Fundamentals of Financial Management, Prentice Hall of India Pvt. Ltd., New Delhi, pp.254-277.
4. Donald E. Fischer and Ronald J. Jordan (2006) , Security Analysis and Portfolio Management (6th ed.,), Prentice Hall of India Pvt. Ltd., New Delhi, pp.257-275.
5. Dr. Selvam M., Dr. Babu M., Indumathi G., Kogila N. (2010) , "Impact of Dividend Announcement on Share Price : An Evaluation Study", Indian Journal of Finance, Vol.4, No.4, pp.3-16.
6. Eugene F. Brigham, Michael C. Ehrhardt (2007), Financial Management (Theory & Practice) (6th ed.,), Thomson India Edition, United States, pp.261-263.
7. James C. Van Horne. (2002) , Financial Management and Policy(12th ed.,), Pearson Education Asia, Delhi, pp.85-89.
8. Khan. M.Y., and Jain. P.K. (2011), Financial Management, Tata McGraw-Hill Publishing Company, New Delhi, pp. 4.7 - 4.10.
9. Pandey I.M. (2010) , Financial Management (10th ed.,), Vikas Publishing House Pvt. Ltd., New Delhi, pp.441-442.
10. Prasanna Chandra (2008) , Investment Analysis and Portfolio Management, Tata McGraw Hill Publishing House, New Delhi, pp.446-462.
11. Ranganatham M., Madhumathi R. (2005) , Investment Analysis and Portfolio Management, Pearson Education, Delhi, pp.273-296.
12. Sam Luther C.T. (2010), "Sustainable Growth Rate - A Case Study on Wipro and Infosys", Indian Journal of Finance, Vol. IV, No.1, pp.46-53.
13. Sudarsan Reddy G. (2010) , Financial Management Principles and Practices (2nd rev. ed.,), Himalaya Publishing House, pp.176-180.
14. Vyuptakesh Sharan ( 2005) , Fundamentals of Financial Management, Pearson Education, Delhi,pp.33-36.

Dr. C. Viswanatha Reddy
Associate Professor
Department of Management Studies
Sree Vidyanikethan Institute of Management, Tirupati
Andhra Pradesh.
vsrits@yahoo.com

J. Viswa Pavani
MBA IV Semester Student,
Department of Management Studies
Sree Vidyanikethan Institute of Management,Tirupati
Andhra Pradesh.