Initial Public Offering (IPO) is when a firm is to be changed into a public firm by issuing stocks and selling them in the stock exchange.
In developed stock exchanges, there would be 300-400 IPOs each year but with some major anomalies namely as "under pricing, long run price underperformance and hot IPOs",or in other words, they are " high first day return, low long run return and boom market " .of which the first and second are more common , so they have been the subject of many studies in the world and also this thesis is to survey them as long as possible.
The goals of this study are to find:
• What are the anomalies of IPOs and why they are appeared?
• Is under pricing the reason of IPOs anomalies in the TSE ?
• Is long run price underperformance the reason of IPOs anomalies in the TSE?
Results of this study show that there is no under pricing in the TSE, but overpricing have been seen. also, long run price underperformance have been seen six months after the IPOs, this shows that there is no proper access to information for investors at the time of the IPO and this problem will be solved six months after the IPO with representation of interim period reports .
Other results of the study show the relationship between industry and under pricing. Also, there is a relationship between EBT of three years before IPO (as index of quality, risk and reputation of firm) , issued equity (as index of agency cost) and long run price underperformance .