A note on Brazilian IPOs performance in the long run

Avelino, Ricardo

doi:10.5935/0034-7140.20200019

Ricardo Avelino

Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo (FEA/USP). Av. Prof. Luciano Gualberto, 908, Cidade Universitária, São Paulo, SP, CEP 05508-010, Brasil.

https://orcid.org/0000-0002-1343-8891

avelino@usp.br

Year	Total of 152 offerings		143 offerings insample		Total included
Year	No. of IPOs	Aggregate grossproceeds (R$ millions)	No. of IPOs	Aggregate gross proceeds (R$ millions)	No. of IPOs (%)	Aggregate gross proceeds (%)
2004	7	4,487,065,024	7	4,487,065,024	100.0	100.0
2005	10	6,333,364,411	9	6,317,364,411	90.0	99.7
2006	26	15,373,613,634	24	13,817,877,849	92.3	89.9
2007	64	55,648,186,085	59	53,248,633,923	92.2	95.7
2008	4	7,494,941,362	3	7,474,240,362	75.0	99.7
2009	6	23,831,458,391	6	23,831,458,391	100.0	100.0
2010	11	11,193,373,738	11	11,193,373,738	100.0	100.0
2011	11	7,175,095,457	11	7,175,095,457	100.0	100.0
2012	3	3,932,950,736	3	3,932,950,736	100.0	100.0
2013	10	17,293,349,990	10	17,293,349,990	100.0	100.0
Total	152	152,763,398,828	143	148,771,409,881	94.1	97.4

Cohort Year	Number of IPOs	Five-Year Holding Period Return		Wealth Relative
Cohort Year	Number of IPOs	IPOs	Market	Wealth Relative
2004	7	152.06	197.49	0.847
2005	9	198.98	138.42	1.254
2006	24	22.11	22.70	0.995
2007	59	23.51	16.81	1.057
2008	3	178.29	-3.77	2.892
2009	6	77.36	-14.95	2.085
2010	11	25.92	-15.67	1.493
2011	11	-25.24	-8.85	0.820
2012	3	-2.47	23.29	0.791
2013	10	125.93	78.38	1.266
Total	143	49.17	32.50	1.126

Gross proceeds (R$)	Adjusted average initial return	Five-year wealth relative	Sample Size
Gross proceeds (R$)	Adjusted average initial return	Five-year wealth relative	Month 0	Month 60
120,745,549-299,999,999	-1.32	1.459	19	16
300,000,000-349,999,999	1.49	0.921	15	12
350,000,000-399,999,999	5.91	0.816	14	14
400,000,000-449,999,999	4.00	1.302	17	16
450,000,000-499,999,999	4.62	1.156	16	12
500,000,000-599,999,999	4.20	1.234	17	17
600,000,000-799,999,999	5.49	1.200	18	16
800,000,000-1,199,999,999	9.76	0.966	14	11
1,200,000,000-9.843,069,357	5.27	1.020	13	13
All (mean)	4.18	1.140	143	127
All (median)	1.97	0.855	143	127

Initial return quintile	All offerings		Segmented by gross proceeds
	All offerings		Proceeds < R$465 million		Proceeds > R$465 million
	Five-year wealth relative	Sample Size	Five-year wealth relative	Sample Size	Five-year wealth relative	Sample Size
12.49 <IR = 49.03	1.029	28	1.059	17	0.983	11
4.59 <IR = 12.49	0.978	29	1.047	17	0.879	12
-0.07 <IR = 4.59	1.098	29	1.140	14	1.058	15
-3.38 <IR = -0.07	1.271	28	1.287	16	1.249	12
-17.18 <IR = -3.38	1.323	29	1.432	17	1.168	12

Economic Sector	Sample size	Average gross proceeds	Initial return	Five-year wealth relative
Financial (Banks)	13	1,476,987,862	1.60	0.862
Financial (Others)	18	1,913,132,254	7.99	1.562
Transportand Construction (Civil Construction)	20	483,681,355	4.32	0.836
Transportand Construction (Others)	10	580,144,425	6.65	0.822
Cyclical Consumption	25	399,970,616	2.36	1.571
Non Cyclical Consumption	20	587,077,497	6.23	1.163
Telecommunication and Public Utility	10	731,956,863	5.76	1.329
AllOther Firms	27	722,119,848	1.43	0.847

Secondary shares (%)	Samplesize	Five-year wealth relative
0.00	45	1.351
0.01-20.00	19	0.780
20.01-40.00	31	1.005
40.01-60.00	15	0.821
60.01-80.00	16	1.179
80.01-100.00	17	1.471

Panel A
Intercept	Adjusted initial return	Gross proceeds	Annual Number of IPOs	Secondary shares	R̅²
1.860	-0.015	-0.091	-0.469	0.002	0.046
(0.036)	(0.099)	(0.476)	(0.213)	(0.457)
Panel B
Intercept	Adjusted initial return	Gross proceeds	Three-month Ibovespa return	Secondary shares	R̅²
1.715	-0.018	-0.098	0.002	0.003	0.036
(0.048)	(0.116)	(0.455)	(0.833)	(0.256)
Intercept	Adjusted initial return	Gross proceeds	Six-month Ibovespa return	Secondary shares	R̅²
1.704	-0.017	-0.096	0.001	0.003	0.036
(0.051)	(0.081)	(0.448)	(0.882)	(0.255)
Intercept	Adjusted initial return	Gross proceeds	Nine-month Ibovespa return	Secondary shares	R̅²
1.701	-0.017	-0.097	0.001	0.003	0.036
(0.049)	(0.079)	(0.455)	(0.847)	(0.247)
Intercept	Adjusted initial return	Gross proceeds	Twelve-month Ibovespa return	Secondary shares	R̅²
1.624	-0.018	-0.101	0.003	0.003	0.043
(0.059)	(0.071)	(0.071)	(0.313)	(0.192)

Month of seasoning	Number of firms trading	Mean Holding Period Return		Wealth Relative
Month of seasoning	Number of firms trading	IPOs	Benchmark	Wealth Relative
1	143	1.29	0.31	1.010
2	143	3.08	2.00	1.011
3	143	5.39	4.19	1.012
4	143	5.26	5.37	0.999
5	143	5.70	7.44	0.984
6	143	7.33	8.80	0.987
7	143	11.32	10.82	1.005
8	143	11.75	12.30	0.995
9	143	10.77	12.87	0.981
10	143	12.11	13.79	0.985
11	143	11.01	12.45	0.987
12	142	10.19	11.80	0.986
13	142	8.63	11.15	0.977
14	142	7.78	10.18	0.978
15	142	6.67	9.15	0.977
16	141	6.62	8.55	0.982
17	140	5.33	8.57	0.970
18	140	5.55	8.29	0.975
19	140	6.19	8.37	0.980
20	140	5.33	7.20	0.983
21	140	5.50	8.08	0.976
23	140	10.89	11.17	0.998
24	140	11.90	13.80	0.983
25	139	12.83	14.76	0.983
26	139	14.92	16.91	0.983
27	139	20.92	20.81	1.001
28	137	17.10	20.52	0.972
29	137	19.35	22.60	0.974
30	137	20.09	22.58	0.980
31	137	20.44	23.66	0.974
32	137	22.53	26.42	0.969
33	135	22.57	24.98	0.981
34	135	25.75	27.24	0.988
35	135	27.46	29.38	0.985
36	135	27.85	30.21	0.982
37	135	30.22	31.09	0.993
38	134	29.44	30.67	0.991
39	134	28.88	31.42	0.981
40	133	29.40	30.88	0.989
41	132	31.31	33.99	0.980
42	131	29.15	31.38	0.983
43	131	31.49	32.87	0.990
44	129	30.62	31.41	0.994
45	129	31.72	30.80	1.007
46	129	31.75	31.62	1.001
47	129	32.27	29.50	1.021
48	129	29.99	26.69	1.026
49	129	32.16	26.65	1.044
50	129	34.72	27.94	1.053
51	129	35.07	27.39	1.060
52	129	37.72	29.61	1.063
53	128	39.52	30.08	1.073
54	127	36.08	29.39	1.052
55	127	37.54	29.64	1.061
56	127	39.19	30.94	1.063
57	127	42.62	30.34	1.094
58	127	42.91	30.69	1.094
59	127	45.28	32.26	1.099
60	127	49.17	32.50	1.126

[1] avelino@usp.br

Brasil

Brasil

A note on Brazilian IPOs performance in the long run

Abstract