Research on the impact of private equity investment on IPO underpricing

Abstract

With the development of the capital market, most companies will choose to go public to obtain financing and information resources, and private equity investment has a non-negligible impact on the IPO underpricing of enterprises while supporting the listing of enterprises. Based on previous researches, this paper explores the impact of private equity investment on IPO underpricing. Firstly, this paper expounds the diversified heterogeneity of private equity investment on IPO underpricing in different scenarios, including the different impacts of factors such as shareholding ratio and the number of institutions jointly holding shares. Then, the motivation of private equity investment to participate in the IPO of enterprises is analyzed, covering the motivation of long-term investment and strategic cooperation, signaling motivation and name-by-name motivation. Finally, this paper analyzes in detail the channels through which private equity investment affects corporate IPO underpricing, such as influencing market signal transmission through the macro-level certification and supervision effect, and influencing corporate IPO underpricing through the micro-level of differentiated investment.