The impact of lead underwriter ranking on the offer price revision of IPO firms: Evidence from the US

Abstract

This paper examines the effect of lead underwriter ranking on the offer price revision of IPO (initial public offering) firms from the perspective of underwriter quality. Using the offer price revision from the SDC (Securities Data Company) in the US and a sample of 2,188 IPOs from 1990 to 2019, we find that the offer price revision of IPO is positively associated with high-ranked lead underwriters, while negatively related to low-ranked lead underwriters. Additional analysis suggests that IPO underpricing has a positive relation with high-ranked lead underwriters but no relation with low-ranked lead underwriters. Moreover, our study reveals that IPO underwritten by low-ranked underwriters raise significantly lower amounts in IPO and have poorer long-run performance. © 2025 The Author(s). Co-published by NISC Pty (Ltd) and Informa UK Limited, trading as Taylor & Francis Group.