IPO Marketing Disclosure Quality and Post-Listing Volatility: Evidence from India’s SME Exchange

Abstract

This paper investigates the impact of marketing disclosure quality in Initial Public Offerings (IPOs) on post-listing stock volatility in the context of India's SME Exchange (NSE EMERGE and BSE SME). Using a sample of 125 SME IPOs listed between 2018 and 2024, we assess the linguistic features, tone, and forward-looking statements in prospectuses and correlate them with price volatility and investor behavior in the first 90 trading days. Results reveal that IPOs with aggressive, optimistic, or vague marketing disclosures tend to exhibit higher post-listing volatility. Firms with well-structured, balanced, and transparent disclosure narratives attract more stable price trajectories. Our findings offer implications for regulators, underwriters, and SME promoters in optimizing communication strategy and managing market expectations.