A Review of IPO Under-pricing Phenomenon in Asia

Albada, Ali; Yong, Othman

doi:10.32890/ijbf2019.14.0.9909

Cited by 8 publications

(6 citation statements)

References 54 publications

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“…IPOs in all 38 countries are underpriced with average initial returns ranging from 5.4% in Denmark (1984–1998) to 256.9% in China (1990–2000). A more recent overview of underpricing for Asia‐Pacific markets is provided by Albada and Yong (2019), who report average initial returns from 15.8% in Hong Kong (1980–2013) to 118.4% in China (1990–2013). For Japan, they report an average underpricing of 41.7% for the period 1970 to 2013.…”

Section: Related Literaturementioning

confidence: 99%

Auctions versus bookbuilding: The effects of IPO regulation in Japan

Lehmann¹,

Weber

2022

The Financial Review

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We analyze a regulatory change in the Japanese IPO market that created an abrupt shift from hybrid price‐discriminatory auctions to bookbuilding. We find that bookbuilding leads to higher underpricing than hybrid price‐discriminatory auctions. Furthermore, we find evidence that price accuracy tends to be higher for auctions than for bookbuilding. The results hold under a variety of OLS specifications and with regression discontinuity designs exploiting the abrupt change of the regulation.

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Section: Related Literaturementioning

confidence: 99%

Auctions versus bookbuilding: The effects of IPO regulation in Japan

Lehmann¹,

Weber

2022

The Financial Review

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“…Ritter (2003) summarizes the average underpricing of IPOs in 38 countries for periods between 1960 and 2000. IPOs in all 38 countries are underpriced with average initial returns ranging from 5.4% in Denmark (1984Denmark ( -1998 to 256.9% in China (1990China ( -2000. A more recent overview of underpricing for Asia-Pacific markets is provided by Albada and Yong (2019), who report average initial returns from 15.8% in Hong Kong (1980Kong ( -2013 to 118.4% in China (1990China ( -2013. For Japan, they report an average underpricing of 41.7% for the period 1970 to 2013.…”

Section: Related Literaturementioning

confidence: 99%

IPO Underpricing and Aftermarket Price Accuracy: Auctions vs. Bookbuilding in Japan

Lehmann

Weber

2021

SSRN Journal

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We analyse a regulatory change in the Japanese IPO market that created an abrupt shift from hybrid price-discriminatory auctions to bookbuilding. We find that bookbuilding leads to significantly higher underpricing than hybrid price-discriminatory auctions. Further, we find evidence that price accuracy tends to be higher for auctions than for bookbuilding. The results hold under a variety of OLS specifications and with regression discontinuity designs exploiting the abrupt change of the regulation. The results suggest that the interests of issuers and underwriters are not aligned. The popularity of bookbuilding seems puzzling from this perspective.

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“…In more recent review papers on IPO literature, authors have focused on topics such as IPO withdrawal, IPO underpricing, the role of top-level decision-makers in IPOs and the IPO underpricing phenomenon in Asia (Albada and Yong, 2019; Cirillo et al , 2018; Helbing, 2019; Jamaani and Alidarous, 2019). The phenomenon of underpricing in IPOs has received considerable attention in the literature.…”

Section: Introductionmentioning

confidence: 99%

Studies on Indian IPO: systematic review and future research agenda

Chatterjee,

Bhattacharjee,

Chakraborty

2023

QRFM

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Purpose This paper aims to review, discuss and synthesize the literature focusing on the Indian initial public offering (IPO) market. Understanding the Indian IPO market can help answer broader corporate finance questions. The growing number of IPOs in the Indian context, coupled with the increasing importance of the Indian economy in the global market, makes this review an essential topic. Design/methodology/approach The systematic literature review methodology was adopted to review 111 papers published between 2002 and 2021. The authors used the Preferred Reporting Items for Systematic Reviews and Meta-Analyses approach during the review process. Additionally, the authors use a bibliometric review methodology to examine the pattern and trend of research in this area of interest. Furthermore, the authors conduct a critical review and synthesis of the top 20 papers based on citations. The authors also use a co-citation network and manual content analysis method to identify key research themes. Findings This review helps in identifying major themes of research in this area of interest. The authors find that majority of the research has focused on IPO performance whereas post-IPO performance needs critical attention as well. The authors develop a comprehensive framework and future research agenda based on their discussion. Research limitations/implications Meta-analysis of the literature can be conducted to gain better insights into the findings of prior studies. Practical implications This review paper develops a comprehensive overview on Indian IPO market which can be of interest not only to Indian scholarship. India as an economy is increasingly gaining attention at the global level. Hence, the future research objectives as illustrated in the study can be of interest for the global scholarship also. Originality/value To the best of the authors’ knowledge, this is the first comprehensive review paper that examines, synthesizes and outlines the future research agenda on Indian IPO studies. This review can be useful for researchers, business policymakers, finance professionals and anyone else interested in the Indian IPO market.

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A Review of IPO Under-pricing Phenomenon in Asia

Cited by 8 publications

References 54 publications

Auctions versus bookbuilding: The effects of IPO regulation in Japan

Auctions versus bookbuilding: The effects of IPO regulation in Japan

IPO Underpricing and Aftermarket Price Accuracy: Auctions vs. Bookbuilding in Japan

Studies on Indian IPO: systematic review and future research agenda

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