Unveiling the Pricing Anomaly: A Detailed Examination of Initial Public Offerings in Borsa Istanbul in 2023

Authors : Mustafa Özyeşil, Havane Tembelo

Pages : 97-116

Doi:10.26650/ISTJECON2024-1499157

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Publication Date : 2025-07-14

Article Type : Research Paper

Abstract :This study investigates the short-term pricing anomalies observed in the initial public offerings in Borsa Istanbul during 2023. The raw returns of 39 newly listed firms were initially calculated and benchmarked against the Borsa Istanbul-100 index. To determine abnormal returns, these raw returns were adjusted for market performance over periods of one, three, and seven days post-offering. The statistical significance of these abnormal returns was evaluated using t-statistics at a 5% significance level. The results demonstrate statistically significant pricing anomalies, thereby challenging the market efficiency hypothesis. The presence of these anomalies shows that market participants do not immediately incorporate all available information into IPO pricing. This research contributes to the literature by highlighting the unique dynamics of an emerging market and provides empirical evidence of persistent short-term anomalies in initial public offering pricing in Borsa Istanbul. It underscores the need for enhanced regulatory frameworks to improve market efficiency and offers strategic insights for investors navigating the Turkish IPO market. JEL Classification : G12 , G14 , G32
Keywords : IPO, Pricing anomalies, Short-term analysis, Borsa Istanbul Stock Exchange, Abnormal returns

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