Business, Management and Accounting
2 years ago

Prestigious underwriters drive IPO underpricing and offer discounted shares.

1 view
Australian Journal of Management
Underwriting in the Australian IPO markets: Determinants and pricing
Alastair Marsden, Zoltan Murgulov, S. Ghon Rhee, Madhu Veeraraghavan

Paper Summary

The study looked at why some Australian companies get underwritten for their IPOs and how much they pay for it. They found that IPOs that let people buy more shares, use bookbuild offers, and take longer to list are less likely to be underwritten. Also, top underwriters lead to higher IPO prices but charge lower fees. This is because they give special deals to their clients or favorite investors.

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