Does Listing Board Influence The Level of Underpricing?

I Gede Candra Kusuma, Gerianta Wirawan Yasa

Abstract


Regulatory contrasts among stock market listing boards can significantly affect firms’ initial public offering (IPO) returns. Newly listed firms often encounter an informational asymmetry, creating uncertainty. To mitigate the risk of insufficient market absorption, underwriters typically set IPO prices below the fair value to attract investors. This practice is particularly evident on boards with stricter regulations, such as the Main Board (Papan Utama), where full commitment underwriting often leads to underpricing. This study aims to explore the differences in underpricing between firms listed on the Main Board and their alternative board and how board listing factors influence this underpricing. Utilising ANOVA and linear regression analysis, the results reveal a significant difference in underpricing based on the listing board, highlighting the implications for information asymmetry and signalling theory.

Keywords


nitial Public Offering, Underpricing, Listing Board, Main Board, Development Board, Acceleration Board

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References


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DOI: https://doi.org/10.17509/jrak.v13i1.82897

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