Determinants of IPO Underpricing in Indonesia (2021–2024): The Roles of Offer Size, Offer Price, Underwriter Reputation, Syndicate Size, and Market Condition

Denny Tewu; Martua Eliakim; Sri Bintang Elisabet

doi:10.55927/ijba.v5i5.15593

Authors

Denny Tewu Universitas Kristen Indonesia
Martua Eliakim Universitas Kristen Indonesia
Sri Bintang Elisabet Universitas Kristen Indonesia

DOI:

https://doi.org/10.55927/ijba.v5i5.15593

Keywords:

IPO Underpricing, Offer Size, Underwriter Reputation, Market Condition

Abstract

This study investigates the determinants of IPO underpricing in Indonesia from 2021 to 2024, emphasizing the effects of offer size, offer price, underwriter reputation, syndicate size, and market condition. Employing a quantitative descriptive–verificative design, the study analyzes secondary data from 215 IPOs listed on the Indonesia Stock Exchange using multiple linear regression (SPSS 26) after data validation and classical assumption testing. The results reveal that offer size, offer price, underwriter reputation, and syndicate size negatively influence underpricing, whereas market condition has a positive and significant impact. The model explains 61.2% of underpricing variation, reinforcing the applicability of information asymmetry and signaling theories in emerging markets.

Downloads

Download data is not yet available.

References

AP, M., Manalu, S. S., Teguh S, F., & Tewu, M. L. (2023). Analisis Kinerja Keuangan PT Telkom Indonesia (Persero) Tbk Melalui Analisis Rasio Keuangan Tahun 2020-2022. Jurnal Manajemen Risisko, 3(2), 103-116. http://ejournal.uki.ac.id/index.php/mr

Baker, M., & Wurgler, J. (2002). Market timing and capital structure. The Journal of Finance, 57(1), 1–32. https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6261.00414

Beatty, R. P., & Ritter, J. R. (1986). Investment banking, reputation, and the underpricing of initial public offerings. Journal of Financial Economics, 15(1–2), 213–232. https://doi.org/10.1016/0304-405X(86)90055-3

Bursa Efek Indonesia. (2024). Daftar Perusahaan Tercatat dan Data IPO 2021–2025. Jakarta: IDX Research. https://www.idx.co.id/id/perusahaan-tercatat/aktivitas-pencatatan

Certo, S. T., Holcomb, T. R., & Holmes, R. M. (2009). IPO research in management and entrepreneurship: Moving the agenda forward. Journal of Management, 35(6), 1340–1378.* https://doi.org/10.1177/0149206309347375

Destine, D., Manik, R., Sianturi, A. S., Sembel, R., & Sintha, L. (2025). Impact of Governance and Restructuring on Post-IPO Stock Value: Event Study of AGM and EGM at PT Totalindo Eka Persada. Journal of Finance and Business Digital, 4(2), 445-458. https://doi.org/10.55927/jfbd.v4i2.211

Harjayanti, D. R. (2024). KEBERAGAMAN GENDER DEWAN DIREKSI, IPO UNDERPRICING DAN KINERJA JANGKA PANJANG IPO DI INDONESIA (Doctoral dissertation, UNIVERSITAS NEGERI JAKARTA). http://repository.unj.ac.id/57845/

Hopp, C., & Dreher, A. (2013). Do differences in institutional and legal environments explain cross-country variations in IPO underpricing? Applied Economics, 45(4), 435–454.

https://doi.org/10.1080/00036846.2011.605763

Journal of Financial Economics, 23(2), 303–323. https://doi.org/10.1016/0304-405X(89)90060-3

Loughran, T., & Ritter, J. R. (2004). Why has IPO underpricing changed over time? Financial Management, 33(3), 5–37. https://www.jstor.org/stable/3666262

Manurung, A. H., Tjahjana, D., Pangaribuan, C. H., & Tambunan, M. E. (2021). Metode Riset: Akuntansi, Investasi Keuangan dan Manajemen. http://repository.uki.ac.id/19189/

Otoritas Jasa Keuangan. (2024). Statistik Perbankan Indonesia Juni 2025. Jakarta: OJK. Diakses dari https://www.ojk.go.id

Ovtchinnikov, A. V. (2013). Merger waves following industry deregulation. Journal of Corporate Finance, 21, 51-76. https://doi.org/10.1016/j.jcorpfin.2013.01.009

Rock, K. (1986). Why new issues are underpriced. Journal of Financial Economics, 15(1–2), 187–212. https://doi.org/10.1016/0304-405X(86)90054-1

Saldoso, M. (2025). Role of Packaging, Influence and Brand on Purchase Intention. Journal of Current Research in Business and Economics, 4(1), 1833-1869. https://www.jcrbe.org/index.php/rbe/article/view/444

Tewu, M. D., Bernarto, I., Suwarno, S., & Lisdiono, P. (2024). The effect of enterprise risk management and compliance practices on the firm performance of Indonesian banking companies. Indonesian Journal of Business and Entrepreneurship (IJBE), 10(1), 52-52. https://doi.org/10.17358/ijbe.10.1.52

Tambunan, M. E., Siregar, H., Manurung, A. H., & Priyarsono, D. S. (2016). Determinan intensitas transaksi afiliasi pada perusahaan-perusahaan dalam grup bisnis di Bursa Efek Indonesia. Journal of Technology Management, 15(2), 121-138. https://www.neliti.com/publications/116340/determinan-intensitas-transaksi-afiliasi-pada-perusahaan-perusahaan-dalam-grup-b

Virtanen, R. E. (2024). Impact of Initial Public Offerings and Seasoned Equity Offerings on Initial and Aftermarket Price Performance: An Empirical Analysis in the Nordic Markets. https://urn.fi/URN:NBN:fi-fe2024070160058