Initial public offerings of energy companies in Japan

Abstract

This paper analyses the mispricing of 20 energy, utility and natural resources IPOs in Japan from the year 1998 to 2009. The study confirms that the offer price and issue size have positive relationship with the IPO underpricing. It finds that the underwriter’s gross spread is positively related to the degree of underpricing as well. Also, the study suggests that the firm’s age, underwriter’s reputation, listing exchange are inversely correlated with the stocks’ initial return. It also explores that the IPOs listed after 2007 global financial crisis tend to have lower returns than those listed before/in 2007.