PROFITABILITY, INSTITUTIONAL OWNERSHIP, AND IPO RETURNS: THE MODERATING ROLE OF UNDERWRITER REPUTATION IN INDONESIA

Abstract

This study examines how profitability and institutional ownership are associated with the aftermarket returns of firms undertaking initial public offerings (IPOs) on the Indonesia Stock Exchange between 2021 and September 2025, and whether underwriter reputation moderates these relationships. The source study reports 256 initially identified issuers and estimates separate interaction regressions for cumulative returns from the offer price to the first trading day, approximately one week, and approximately one month. Reported mean returns are 17.21%, 44.74%, and 75.01%, respectively. On the first day, return on assets (p = 0.0688), institutional ownership (p = 0.0015), and both interactions with underwriter reputation (p = 0.0404 and p = 0.0429) meet the stated 10% threshold. No individual regressor meets that threshold after one week; after one month, institutional ownership remains significant (p = 0.0060), whereas return on assets does not (p = 0.1018). The results suggest horizon-dependent associations, but missing coefficient tables and replication data limit directional and causal interpretations. The analysis highlights the distinction between institutional shareholding, actual ownership transparency, and market investability.