Abstract:Sci-Tech innovation board (STAR Market) adopted the trading rule that there was no price limit in the first five trading days after listing,based on 170 newly issued shares including star market from July 22, 2019 to March 31, 2020, and extracts four indicators on behalf of the company fundamentals through factor analysis, and adds dummy variables and interactive items to make multiple regression to study whether price limits affect IPO underpricing. The empirical results show that the setting of price limits on the first day makes IPO underpricing more serious, and the net IPO proceeds have a significant negative effect on IPO underpricing when the first day price limit is set, and the net IPO proceeds have little effect on IPO underpricing when the first day price limit is not set.