IPO underpricing in Norway : Empirical evidence from 2010-2021

Abstract

This master thesis investigates the underpricing of 172 initial public offerings (IPO) listed on the Norwegian stock market from January 2010 to December 2021. The sample is distributed among 123 non-sponsored IPOs (NS), 27 private equity-backed IPOs (PE), and 22 venture capital-backed IPOs (VC). Our analysis shows that Norwegian IPOs, on average, are underpriced and have a first-day return of 6.33%. Furthermore, we find that PE-backed IPOs experience less underpricing than VC-backed and NS-IPOs on average, but we do not find any statistically significant evidence. The results reveal that PE-backed companies are older on average and may imply that older companies have less ex-ante uncertainty. We also found that IPOs listed during “hot” markets experience significant underpricing, which aligns with previous studies.