What Factors drive IPO Prices? An Empirical Study of Alternative Factors

Abstract

IPO pricing is an emerging field in Finance that contains elements of Economics. It has been studied by researchers frequently over the past two decades. With availability of data and standardization of accounting norms, we can now study share prices in much greater detail. Few (or no) studies have so far touched the aspects
of the „objectives of the IPO‟ or „type of industry‟ for the firm. Pricing of an IPO is governed by behavioral factors, and companies do try to induce investors to rush for their stocks. In this paper, we attempt to draw a relation between IPO pricing and the variables that we have introduced in this analysis.