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The long-run performance of IPOs: the case of the Stock Exchange of Mauritius

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  • Ushad Subadar Agathee
  • Raja Vinesh Sannassee
  • Chris Brooks

Abstract

This study examines the long-run performance of initial public offerings on the Stock Exchange of Mauritius (SEM). The results show that the 3-year equally weighted cumulative adjusted returns average - 16.5%. The magnitude of this underperformance is consistent with most reported studies in different developed and emerging markets. Based on multivariate regression models, firms with small issues and higher ex ante financial strength seem on average to experience greater long-run underperformance, supporting the divergence of opinion and overreaction hypotheses. On the other hand, Mauritian firms do not on average time their offerings to lower cost of capital and as such, there seems to be limited support for the windows of opportunity hypothesis.

Suggested Citation

  • Ushad Subadar Agathee & Raja Vinesh Sannassee & Chris Brooks, 2014. "The long-run performance of IPOs: the case of the Stock Exchange of Mauritius," Applied Financial Economics, Taylor & Francis Journals, vol. 24(17), pages 1123-1145, September.
    • Handle: RePEc:taf:apfiec:v:24:y:2014:i:17:p:1123-1145
    DOI: 10.1080/09603107.2014.924294
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    Cited by:

    1. Nurwahida Yaakub & Mohamed Sherif & Roszaini Haniffa, 2018. "The Post-issue Market Performance of Initial Public Offerings: Empirical Evidence from the Malaysian Stock Markets," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 17(3_suppl), pages 376-414, December.
    2. Nischay Arora & Balwinder Singh, 2024. "Do Prestigious Underwriters Shape the Performance of SME IPOs in India?," Global Business Review, International Management Institute, vol. 25(3), pages 632-655, June.

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