The Underpricing of Infrastructure IPOs: Evidence from China

Qile Tan (), Bill Dimovski () and Victor Fang ()
Additional contact information
Qile Tan: Department of Finance, Deakin University, 1 Gheringhap St., Geelong Victoria 3220, Australia
Victor Fang: Department of Finance, Deakin University, 225 Burwood Hwy., Burwood, Victoria 3125, Australia

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2015, vol. 18, issue 04, 1-31

Abstract: This study investigates the underpricing of 135 infrastructure IPOs in China from 1996 to 2012. It follows infrastructure IPO studies in Australia and India which report average underpricing returns to subscribers of 3.5% and 25.4%, respectively. The average underpricing return for Chinese infrastructure IPOs is substantially higher at 86.3%, but interestingly substantially lower than the underpricing of Chinese IPOs generally. The issue size, government ownership and the pre-IPO earnings per share are helpful in explaining the underpricing of Chinese infrastructure IPOs while the underwriter reputation does not appear to have much explanatory power. In addition, we find the underpricing of infrastructure IPOs in China is also affected by its local GDP levels.

Keywords: China; underpricing; infrastructure; IPOs (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Working Paper: The Underpricing of Infrastructure IPOs: Evidence from China (2013)
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DOI: 10.1142/S0219091515500253

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