The Influence of Underwriter Reputation and Profitability on Underpricing During IPOs on the Indonesia Stock Exchange (2021-2025) (Jurnal Arbitrase : Jurnal Ekonomi, Akuntansi, Manajemen dan Bisnis)

Summary

• During the 2021–2025 period, 183 out of 233 companies conducting IPOs on the Indonesia Stock Exchange experienced underpricing.p.1
• Out of 233 initial public offerings, 44 companies experienced overpricing and 6 companies maintained flat share prices on their first trading day.p.2
• Out of an initial sample of 158 companies, outlier detection eliminated 125 extreme data points, leaving a final analytical sample of 33 companies.p.4
• Underwriter reputation showed a positive regression coefficient of 0.047 but was statistically insignificant with a p-value of 0.327.p.7
• Profitability proxied by Return on Equity (ROE) exhibited a negative regression coefficient of -0.119 with a p-value of 0.398.p.7
• The regression model yielded an R Square of 0.042, indicating that underwriter reputation and profitability explain only 4.2% of the variation in underpricing.p.8

Key insights

1. A total of 78.5% of companies listing on the Indonesia Stock Exchange between 2021 and 2025 experienced underpricing on their first day of trading.p.2
2. Descriptive statistics indicate that high-reputation underwriters accounted for only 19.62% of the initial 158 sample companies.p.5
3. Underwriter reputation exerts a positive but statistically insignificant partial effect on underpricing with a t-statistic of 0.997.p.7
4. Profitability measured via Return on Equity (ROE) exerts a negative but statistically insignificant effect on underpricing with a t-statistic of -0.858.p.7
5. Simultaneous F-test evaluation yielded an F-statistic of 0.548 and a p-value of 0.584, confirming no combined significant effect on underpricing.p.8
6. Unexamined external variables account for 95.8% of the variation in IPO underpricing during the 2021–2025 period.p.8