Analysis of Underpricing Levels in Initial Public Offering Companies on the Indonesia Stock Exchange

Abstract

If a company wants to go public, it will conduct an Initial Public Offering (IPO) first. The share price at the time of the IPO is predetermined by agreement from issuers and underwriters while when in the secondary market the share price is determined by a market mechanism for the demand and supply that occurs in the market. During an IPO the phenomenon of Underpricing can occur. Because Underpricing is a condition when the stock price in the primary market is lower than in the secondary market. This study aims to determine the effect of Financial Leverage, Market Conditions, Share Offering Percentage, and earnings per share on underpricing. The population used in this study is companies that IPO on the IDX for the 2017-2021 period, namely 247 companies listed. Sample determination uses a purposive sampling technique and there are 20 samples that match these criteria. The results of this study show that partially Financial Leverage, Market Conditions, and earnings per share affect Underpricing while Share Offering Percentage has no effect on Underpricing. Simultaneously, Financial Leverage, Market Condition, Share Offering Percentage, and earnings per share affect Underpricing.s.