Long-Run and Short-Run Returns of Initial Public Offerings (IPO) of Public and Private Companies in Tehran Stock Exchange (TSE) Market

This paper surveys some effective factors on long-term and short-term returns of initial public
offerings (IPO) of public and private companies in Tehran Stock Exchange (TSE) market. We use
panel data approach to compare determinant factors of returns of IPO either in public and
private firms. The results show that P/E ratio, volume of transactions and size of companies are
the main factors of determinant of abnormal long-run returns of IPO in both private and public
companies. In the short-run, the IPO’s returns of private enterprises related to size, and volume
of transaction. Although in the public companies, size, P/E and individual firm’s specification are
the determinants of short-run IPO’s returns. Results of research pointed to conclusion that the
corporate ownership has no significant impact on returns of IPO in short-run and long-run. And
both private enterprises and public companies might retain the profit and release the loss by
set share retention/offering rate and over/under pricing of IPO companies.