The Impact of ESG Reporting on IPO Performance in India’s Pharmaceutical Sector in the Pre- and Post COVID Era

International Journal of Economics and Management Studies

© 2025 by SSRG - IJEMS Journal

Volume 12 Issue 3

Year of Publication : 2025

Authors : Neil Jhunjhunwala

10.14445/23939125/IJEMS-V12I3P103

How to Cite?

Neil Jhunjhunwala, "The Impact of ESG Reporting on IPO Performance in India’s Pharmaceutical Sector in the Pre- and Post COVID Era," SSRG International Journal of Economics and Management Studies, vol. 12,  no. 3, pp. 39-46, 2025. Crossref, https://doi.org/10.14445/23939125/IJEMS-V12I3P103

Abstract:

Investors’ growing concern with sustainability and the global impact of firms has led to an increased emphasis on Environmental, Social, and Governance (ESG) factors in investment decisions. This study investigates the influence of ESG disclosure on the performance of Initial Public Offerings (IPOs) within the Indian pharmaceutical sector. In this domain, empirical research is scarce, particularly in the context of pre- and post-COVID-19 periods. The research aims to evaluate how ESG reporting affects IPO listing gains and short-term and long-term performance, thereby addressing a significant gap in the literature regarding the relationship between ESG factors and IPO outcomes. Utilizing a dataset formulated through a 3-step filtration collection process comprising 35 pharmaceutical IPOs listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) from 2016 to 2023, the study segregates the data into pre-COVID (2016-2019) and post-COVID (2020-2023) periods to analyze the pandemic’s influence on investor behavior. The companies are divided based on their ESG disclosure practices before their IPOs. The findings show that although ESG disclosure has a negligible effect on short-term performance, its effect is significantly positive on long-term performance, especially in the post-COVID era. Moreover, companies that disclosed ESG information during the short-term post-COVID period showed favorable performance compared to those that did not. These results highlight the growing significance of ESG factors in investor decision-making, especially within emerging markets such as India, and emphasize the role of transparent ESG reporting in reducing information asymmetry. The study acknowledges certain limitations, including focusing on a specific sector and geographical region. Future research could benefit from expanding the dataset to encompass various industries and geographic locations and incorporating additional variables to provide a more comprehensive understanding of the evolving dynamics between ESG disclosures and IPO performance.

Keywords:

Covid-19, ESG Reporting, Indian Stock Exchange, IPO Performance, Pharmaceutical Sector.

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