Unexpected underpricing of first IPO: Case study of a Croatian company

In 2006 the Croatian government decided to make an initial public offering (IPO) of the shares of INA Group (INA), one of the leading regional petrochemical companies. The well known phenomenon of governmental underpricing of shareholder issues (Lauren et al., 2004) occurred with an unexpected share price rise of 80% in the first 90 days of trade. A case study of the IPO of INA and of its stock performance is presented. A survey was also performed using a heterogenous convenience sample (N=176) of potential small private investors who were informed of the IPO and familiar with the INA company. This survey consisted of 66 items that were related to various characteristics and perceptions of INA, of the perceptions of potential share value and performance, and of the attitudes and intentions of the subjects regarding the purchase of INA's shares. The data analysis revealed various factors that influenced the perceptions of potential small private investors regarding the image of INA and of its potential stock value change over time.