Investor relation is key, says study

 
A joint study conducted by Interconnected Stock Exchange (ISE) and Investor Relations Society (IRS) found that 54 per cent per cent of institutional investors are willing to pay a premium in range of 15-20 per cent on the prevailing share price of the companies’ which have exemplary investor relation practices in place.

“Research has found that a good Investor Relation program can have a positive impact on corporate image and there appears to be a good amount of correlation between image and share price,” ISE Managing Director P J Mathew said.

“Investors do value good investor relation, and when compared to the developed western markets, Indian companies still have room for improvement in meeting expectations of global fund managers,” IRS President M S Anand said. Our findings show that companies can and should invest more in investor relations than they are currently doing, it will result in better valuation of their stocks, Mathew said.

The study found that this is particularly true of small- and mid-cap companies, where good IR is more of a challenge given limited resources and experience. The survey covered 24 fund managers based in India.