The Influences of Prospectus Information and Macroeconomics on Initial Returns to Companies that Undergo Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX)

Rinaldi Lubis (), Isfenti Sadalia and Nisrul Irawati
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Rinaldi Lubis: Pasca Sarjana Universitas Sumatera Utara, Magister Management
Isfenti Sadalia: Pasca Sarjana Universitas Sumatera Utara, Magister Management
Nisrul Irawati: Pasca Sarjana Universitas Sumatera Utara, Magister Management

A chapter in Proceedings of the 7th Global Conference on Business, Management, and Entrepreneurship (GCBME 2022), 2024, pp 190-205 from Springer

Abstract: Abstract Underpricing may be a phenomenon that always occurs throughout the world, including in Indonesia during an Initial Public Offering (IPO), which suggests that the worth at the time is less than the worth of the shares traded on the secondary market, the difference in price is defined because the initial return. This study examines the effect of ROA, firm size, firm age, inflation, and interest rates on initial return by involving some companies conducting Initial Public Offerings (IPOs) on IDX from 2016 to April 2022 as a population. The sample selection was administered by purposive sampling method and obtained a sample of 175 companies. This study uses multiple rectilinear regression analyses. The results of the t-test show that inflation and interest rates have a big positive effect on initial return partially. While ROA, firm size, and firm age do not have a significant effect on initial return partially. F-test results show that each variable simultaneously affects the initial return. From the results, it are often seen that the proper time to take a position in shares at the time of the IPO, should make a sale when there’s a negative signal within the sort of prospectus information and macroeconomic.

Keywords: initial public offering; initial return; macroeconomics; prospectus; underpricing (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-234-7_18

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