IPO underpricing and aftermarket performance in Italy


  • Alberto Dell’Acqua SDA Bocconi School of Management, Bocconi University, Milan, Italy.
  • Leonardo L. Etro SDA Bocconi School of Management, Bocconi University, Milan, Italy.
  • Emanuele Tetia SDA Bocconi School of Management, Bocconi University, Milan, Italy.
  • Michele Murria SDA Bocconi School of Management, Bocconi University, Milan, Italy.




Aftermarket performance, Initial public offering, Italian stock exchange, Underpricing.


We analyse a sample of 129 Initial Public Offerings (IPOs) on the Italian Stock Exchange from January 2001 to December 2012. Results confirm the presence of underpricing in two thirds of the sample offerings but with an average level of 6.75% that is far below previous studies. Moreover we provide detailed temporal insights to show that the phenomenon is time-varying, albeit our sample does not show a positive correlation with hot market periods only. The average stock performance 30 days after the listing is lower than average first day return, evidence that is mainly explained by temporary actions of price support by underwriters. Finally, through a series of multivariate regression analyses we find that various factors exercise an influence on the IPO underpricing level, specifically: firm size, aftermarket risk, market demand, financial crisis and shares retention by existing shareholders.


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