Turkish IPOs in a changing regulatory and economic environment

The larger underpricing (15 percent) in the early years following the inauguration of Borsa Istanbul indicates the importance of investors, intermediaries, and firm insiders learning about the trading and pricing of firms in organized stock markets. The underpricing in recent years (from 2010 to 2020) averages 5 percent. Micro-level uncertainties about the firm as evidenced by the smaller underpricing in IPOs marketed using fixed offer prices, and the IPOs where underwriters signed on for firm commitment also prove important. Underpricing also proves smaller in larger IPO firms.