An empirical evaluation of risk of underpricing during initial public offering

The companies are increasingly choosing the initial public offering (IPO) as a way out of investment. In recent years, five Russian venture companies have conducted successful IPO. However, most of the companies which went through the initial public offering suffered from undervaluation of shares and had a risk of lower returns and underpricing on the first day of IPO. The article confirms the hypothesis of high efficiency of IPO venture capital companies. These results confirm the prevailing opinion that IPOs of venture companies are also less risky than those of non–venture capital companies. © Springer International Publishing AG, part of Springer Nature 2019.