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How to measure if an IPO is successful?

How to measure if an IPO is successful?

Postby boseda » Thu Jul 19, 2012 5:32 am

Hi Investment Professionals,

I would like to seek help with the following 2 questions.

Thank you so much for your help.


1. How to measure if an IPO is successful?

Eg. In the news that Agricultural Bank of China (ABC) had its IPO last week on Hong Kong and Shanghai stock exchanges, and before its IPO, the ABC said it is likely going to raise $19.2 billion.

So, in what length of time when they reached $19.2 billion called it successful.

Should they take the first day to measure if they are going to get 19.2 billion and called it successful or a month to measure if they are going to get 19.2 billion and called it successful?

2. Also, I would like to know why analysts said in the news that ABC needs to keep its IPO price at $3.2 HKD in order to be a sustainable IPO.

Thank you again.
boseda
 
Posts: 175
Joined: Mon Jun 25, 2012 5:43 pm

How to measure if an IPO is successful?

Postby guri » Thu Jul 19, 2012 5:34 am

An IPO of this size is probably pre filled. The borkers would go to the institutions and guage the likely demand before the IPO is started. Called book-building. It will be successful if it raises the required funds. I see that the bank was initially looking to raise $30bn and then $23bn. There is an over allotment option as well. The IPO may have been underwritten in some way also.
guri
 
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Joined: Tue Jun 26, 2012 3:35 am


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