Determinants of IPO Underpricing in Indonesian Stock Exchange 2021-2023

Abstract

This study investigates the influence of organizational scale, earnings performance, and capital structure on equity underpricing among corporations executing Initial Public Offerings (IPOs) within the Indonesia Stock Exchange throughout 2021–2023. Utilizing comprehensive Indonesia Stock Exchange datasets, the investigation quantifies organizational scale through the natural logarithm of total assets, earnings performance via Return on Assets (ROA), and capital structure through the Debt to Equity Ratio (DER). Through purposive sampling methodology, 87 corporations were identified for multiple regression examination. Research outcomes indicate that earnings performance individually demonstrates statistically significant positive associations with underpricing, whereas organizational scale and capital structure exhibit non-significant relationships. Simultaneously, these three determinants collectively demonstrate significant influence on underpricing phenomena. These findings emphasize the critical importance of profitability indicators in establishing initial valuation outcomes within Indonesia's emerging capital markets.