: Determinants of True Discount and Market Reactions of Initial Public Offering. This research aims to test some variables as determinants of initial return of initial public offering. The initial return is estimated in two components, the true discount of the offer price as well as the market reactions on the listing. Determinants of true discount and market reactions are chosen based on asymmetric information hypotheses and aftermarket liquidity hypotheses. The total samples collected are 40 IPOs from the period 2005-2008. Data analysis method was conducted through multiple linear regression. The study shows that company size, stocks' age and percentage of stocks offered to public have significant and positive impact on true discount. Besides that, the regression result indicates that expected liquidity gave significant and positive impact, while liquidity risk and aftermarket volatility have significant and negative impact on market reaction
