Market and Firm-Specific Factors Affecting Ipos Underpricing- Evidence from Bombay Stock Exchange (2000-2011)

Abstract

Underpricing of IPOs has been considered as a prevalent phenomenon across the world. When companies go public. the equity they sell in as initial public offering tends to be underpriced, resulting in a substantial price jump on the first day trading. Underpricing is generating additional value in the stock when it first becomes traded. This leads to significant gains for investors who have been allocated shares at offer price.