Abstract:
This research is purposed to investigate the most accurate valuation models to determine Initial Public Offering (IPO) price in Indonesia Stock Exchange (IDX). The sample is a mining company which newly listed, PT Kapuas Prima Coal Tbk (ZINC) in October 2017. The sample data is in the form of forecasted financial statements. It was tested by 4 (four) valuation models which are Discounted Cash Flow (DCF), Dividend Discount Model (DDM), Economic Value Added (EVA) and Relative Price-Earnings (PE) and be compared to average post-IPO closing price. This research also investigates why ZINC IPO price was underpriced. The result is documented that DCF is the most accurate valuation model to determine IPO price and we also conclude that underpricing was set as bookbuilding result, in order to stimulating selling process and because of asymmetric information.
