Study of Factors Affecting the Initial Public Offering (IPO) Price of the Shares on the Tehran Stock Exchange

Abstract

Price determined for a company’s shares is true value of its property and opportunity for future development and growth. Nowadays Hundreds of companies enter stock exchange for the first time. Main question of this research is whether pricing the initial offering exchange on Tehran stock exchange is less than actual and what factors affect pricing of initial shares on stock exchange. For this purpose, 115 stock exchange companies from 2006 to 2012 were studied. Data gathered from these companies were analyzed with SPSS. Results indicated that only P/E variable has a significant relation with price changes on initial offerings and had highest impact on price of initial offerings.