Determinants of IPO Initial Return with Underwriter Reputation as a Moderation Variable
DOI:
https://doi.org/10.59890/ijmbi.v4i3.11Keywords:
Initial Return, Profitability, Leverage, Managerial Ownership, Underwriter ReputationAbstract
This study analyzes the determinants of return on initial public offerings (IPOs) in the early stages by examining the effects of profitability, leverage, and management ownership, as well as the moderating role of the underwriter reputation, on firms listing on Indonesia Stock Exchange from 2021 to 2024. Employing a quantitative explanatory approach, this study utilizes secondary data from IPO prospectuses and capital market publications. The data were analyzed using multiple linear regression and Moderation Regression Analysis (MRA). Results show profitability, represented by return on assets (ROA), and management ownership significantly negatively affect early returns, whereas leverage, represented by the debt-to-equity ratio (DER), shows no significance. Furthermore, the underwriter reputation functions as a quasi-moderator that strengthens the association of profitability with initial returns but does not moderate the effects of leverage or management ownership. These findings suggest that the formation of initial returns in the early phase of IPO trading is primarily driven by signals of firm quality and underwriter credibility, whereas information regarding financing structure and internal ownership plays a limited role in investors’ initial valuation decisions.
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