IPO Underpricing in Europe

Abstract

This thesis presents a comprehensive analysis of 1207 initial public offerings (IPOs) listed on various exchanges across Europe from January 2006 to December 2021. We find that on average the IPOs were underpriced at 12,7% when adjusted for market return. Furthermore, we find that IPOs that were backed by either private equity or venture capital were exposed to significantly less underpricing than those that were not. The results also revealed that during the pandemic one observed significantly higher levels of underpricing, and that larger proceeds on average results in higher levels of underpricing.

We would like to acknowledge our thesis supervisor and professor, Janis Berzins, and thank him for his valuable input and guidance throughout working with our thesis.