Initial Public Offering - att köpa grisen i säcken? : En kvalitativ studie om ESG:s roll vid värdering och prissättning av börsnoteringar
Sammanfattning: Abstract: Title: Initial Public Offering - buying the pig in a poke? Authors: Tor Averland and Gustaf Borg Supervisors:Öystein Fredriksen Background and problem: The number of IPOs have broken new records throughout 2020 and early 2021 and the pace is still strong. At the same time numerous investors think that companies with sustainable businesses should be valued higher than those with non-sustainable businesses, whereas terms such as ESG have become popular, replacing previous terms such as CSR. The faith in the higher valuation of sustainable companies has grown strong alongside the launch of regulations and frameworks like the EU-taxonomy and the Paris agreement, which naturally raises the question regarding how sustainability is priced and valued in an IPO. Purpose: The purpose of this study is to analyze how investment banks consider ESG while valuing and pricing Initial Public Offerings, IPOs. The study also intends to analyze how the market perceives ESG through looking at the level of the first day return. Method: The study uses a qualitative approach with an included smaller quantitative element for a regression analysis. The investment banks´ view on valuation and pricing is given through semistructured interviews that later are compared and analyzed with regards to existing literature on the area. The underpricing is analyzed through an OLS multiple regression approach with underpricing as the dependent variable and four other independent variables with ESG-score therein. With this approach, it can be decided whether ESG-score has an influence on the underpricing of IPOs. Conclusion: The result from the study indicates that ESG is valued differently depending on which person and which investment bank that does the valuation which is a result that illuminates the subjectivity that exists in the valuation of stocks. ESG-score does have a negative significant influence on underpricing, which was contradictory to some of the respondents' argumentation. The quantitative part of the study also illustrates and confirms that less uncertainty reduces the IPO underpricing, which is in line with existing literature regarding ex ante uncertainty and information asymmetry.
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