Abstract
The present study provides a comprehensive analysis of the short-run underpricing of initial public offerings (IPO) in Bangladesh and attempts to identify the factors which contribute to such underpricing in this heavily regulated underwriting market. Using a sample of 90 IPOs issued during the short-lived stock market boom in the mid-nineties, we show that increased ownership stake and foreign participation lowers the magnitude of underpricing.
Acknowledgement
The authors would like to thank Mohammad Sohrabuddin and other SEC officials of Bangladesh for supplying the data and related support. The author gratefully acknowledges research help and support from Iftekhar Hasan, Manzur Alam, Fazlul Kader and Iqbal Ahmed. The standard disclaimers apply.