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  • Under Pricing

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    Pragathi Sundar
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    Underpricing in Fintech firms This document discusses underpricing in initial public offerings (IPOs) of fintech firms. It provides an overview of the IPO process including issuer selection of investment banks, share allocation mechanisms, greenshoe provisions and lockup agreements. It also outlines pricing approaches such as fixed price issues and book building issues. Finally, it discusses concepts of underpricing including quantitative evidence of overwhelmingly positive first day returns and explanations for underpricing including institutional and analyst compensation theories. Students are assigned to analyze underpricing differences between fintech and non-fintech firms using size, leverage and profitability as factors and prepare a report with their findings.

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    Underpricing in Fintech firms This document discusses underpricing in initial public offerings (IPOs) of fintech firms. It provides an overview of the IPO process including issuer selection of investment banks, share allocation mechanisms, greenshoe provisions and lockup agreements. It also outlines pricing approaches such as fixed price issues and book building issues. Finally, it discusses concepts of underpricing including quantitative evidence of overwhelmingly positive first day returns and explanations for underpricing including institutional and analyst compensation theories. Students are assigned to analyze underpricing differences between fintech and non-fintech firms using size, leverage and profitability as factors and prepare a report with their findings.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    11 views5 pages

    Under Pricing

    Uploaded by

    Pragathi Sundar
    Underpricing in Fintech firms This document discusses underpricing in initial public offerings (IPOs) of fintech firms. It provides an overview of the IPO process including issuer selection of investment banks, share allocation mechanisms, greenshoe provisions and lockup agreements. It also outlines pricing approaches such as fixed price issues and book building issues. Finally, it discusses concepts of underpricing including quantitative evidence of overwhelmingly positive first day returns and explanations for underpricing including institutional and analyst compensation theories. Students are assigned to analyze underpricing differences between fintech and non-fintech firms using size, leverage and profitability as factors and prepare a report with their findings.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    Underpricing in Fintech

    firms
    Initial Public Offerings – The process
    Market
    IPO transactions
    participants

    Selection of
    Issuer investment
    banks

    Share
    Investment
    allocation
    banks
    mechanism

    Greenshoe
    provision and
    Investors
    lockup
    agreement
    IPO Pricing approaches

    Pricing
    approaches

    Book
    Fixed price
    building
    issue
    issue
    Under pricing – Concepts, evidence & explanations

    Under pricing
    explanations
    • Institutional
    Quantitative explanations
    evidence • Analyst compensation
    • Overwhelming evidence theory
    Under pricing of underpricing
    • Financial anomalies • Book building vs Fixed
    • Positive first day returns price IPOs
    Assignment 1 – Underpricing in Fintech
    firms
    • Source the data from NSE (
    https://www.nseindia.com/market-data/all-upcoming-issues-ipo) for
    the past 10 years
    • Test for the underpricing differences between the Fintech firms and
    the Non-fintech firms
    • Use size, leverage and the profitability (ROA) as an independent
    factors
    • Prepare a report based on your analysis (ppt)
    • Due date – 25/12/2022 (11:59 PM)

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