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Initial Public Offerings of Energy Companies

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Energy Economics and Financial Markets

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Abstract

This study analyses 158 energy company initial public offerings (IPOs) in Australia from January 1994 to December 2010, including the period of the global financial crisis (GFC). The study finds that energy company IPOs had an average 22.0 % underpricing and that those IPOs that sought to raise more equity capital and engaged underwriters had lower underpricing. There is also evidence that suggests energy company IPOs that offered options to their underwriters had higher underpricing returns, effectively cancelling the lower underpricing effect of the underwriting itself. The energy IPOs that raised equity capital after the 2007/8 global financial crisis do not appear to have offered on average, significantly different underpricing returns to their investors compared to those energy IPOs that raised capital prior to this GFC period. The findings of this study offer insights for issuers who seek to lower underpricing, for underwriters involved in the capital raising and for investors who are looking to invest in Australian energy company IPOs.

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Authors and Affiliations

  1. School of Accounting, Economics and Finance, Deakin University, Geelong, Victoria, Australia, 3216

    Bill Dimovski

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  1. Bill Dimovski
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Correspondence to Bill Dimovski .

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Editors and Affiliations

  1. , Department of Finance, VU University Amsterdam, De Boelelaan 1105, Amsterdam, 1081 HV, Netherlands

    André Dorsman

  2. Curtin Business School, School of Economics and Finance, Curtin University, Hayman Road, Bentley, Perth, 6845, West Australia, Australia

    John L. Simpson

  3. Faculty of Economics and Business, Economics, Econometrics and Finance, University of Groningen, Nettelbosje 2, Groningen, 9747 AE, Groningen, Netherlands

    Wim Westerman

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Dimovski, B. (2013). Initial Public Offerings of Energy Companies. In: Dorsman, A., Simpson, J., Westerman, W. (eds) Energy Economics and Financial Markets. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30601-3_13

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  • DOI: https://doi.org/10.1007/978-3-642-30601-3_13

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