What is devolvement risk?


3 Answer(s)


when issue IPO is under subscribe then banker need to buy the unsold shares, and this is devolvement risk for baker

Devolvement is often an indication that the market currently has negative sentiments toward the issue. This negative sentiment can have a significant impact on subsequent demand.When the undersubscription of a security issue forces the underwriting investment bank to purchase unsold securities during an offering.

Devolvement is the risk that the bank or underwirter has to buy the unsold securities in case of undersubscription