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Abstract
This study examined the IPO waiting period from offering to the first trading day listed on the Pakistan Stock Exchange from 1995 to 2018. We find that firms that float shares to the general public have passed through multiple layers of inspection by underwriters, auditors, institutional investors, and regulatory bodies. The waiting period of the unseasoned issue is an essential predictor of uncertainty associated with a firm. To test this proposition, we first determine the endogenous and exogenous factors that influence IPO waiting period. The results confirm that the firms offer price, percentage of shares after issuance of IPO, book building mechanism, and SECP regime influence the IPO waiting period. This study further finds that short waiting period IPOs are associated with less ex-ante uncertainty, reducing the level of underpricing. In addition, we report that during short waiting periods, IPOs are prone to less return volatility and higher aftermarket stock performance.
Keywords
IPOs, waiting period, ex-ante uncertainty, underpricing, long-run performance
DOI
https://doi.org/10.54784/1990-6587.1462
Journal of Economic Literature Subject Codes
G12, G14
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Zanib, T., & Mumtaz, M. (2022). IPO waiting period in Pakistan. Business Review, 17(1), 43-68. Retrieved from https://doi.org/10.54784/1990-6587.1462
Submitted
February 08, 2022
Published
June 30, 2022
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