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Title : | Performance of the initial public offering (IPO) in the Nepalese stock market | Material Type: | printed text | Authors: | Kushal Shrestha, Author | Publication Date: | 2016 | Pagination: | 62p. | Size: | GRP/Thesis | Accompanying material: | 5/B | General note: | Including bibilography | Languages : | English | Descriptors: | Going public (Securities)-Law and legislation Stock market
| Class number: | 332.632 | Abstract: | Primary market is the part of capital market where new securities are issued by the companies to the public and when the companies issue equities to the public for the first time, it is called the Initial Public Offering (IPO). Investors perceive that the investment made in IPO is for sure gain; this creates high demand of the IPO of the companies. In case of Nepal, the IPOs of the commercial banking and hydropower sector have high demand and subscription rate. This excess demand leads to the high initial return. The underpricing of the IPO is well documented phenomenon and widely researched topic and study result is almost similar in almost all countries. The Underpricing refers to the percentage difference between the price at which the IPO shares are offered to investors and the price at which the shares are traded in the stock market afterwards. The studies provide evidence that Initial public offerings exhibit a high level of Under-pricing on the first day of trading on almost every stock exchange of the world and the studies identified several factors that affect the level of underpricing.
This study explores the level of underpricing of the IPOs of Nepalese stock market. It also attempts to find the effect of some explanatory variables in the level of underpricing and tries to find out their direction of relationship. Some of the variables taken are size of the firm, issue size, subscription rate, reputation of issue manager and market cycle. The study found that there is high level of underpricing (200.16 percent). The subscription rate, reputation of issue manager, market condition and firm size of the IPO is significantly positively related with the level of underpricing while issue size do not have significant impact on the level of underpricing in Nepalese stock market. |
Performance of the initial public offering (IPO) in the Nepalese stock market [printed text] / Kushal Shrestha, Author . - 2016 . - 62p. ; GRP/Thesis + 5/B. Including bibilography Languages : English Descriptors: | Going public (Securities)-Law and legislation Stock market
| Class number: | 332.632 | Abstract: | Primary market is the part of capital market where new securities are issued by the companies to the public and when the companies issue equities to the public for the first time, it is called the Initial Public Offering (IPO). Investors perceive that the investment made in IPO is for sure gain; this creates high demand of the IPO of the companies. In case of Nepal, the IPOs of the commercial banking and hydropower sector have high demand and subscription rate. This excess demand leads to the high initial return. The underpricing of the IPO is well documented phenomenon and widely researched topic and study result is almost similar in almost all countries. The Underpricing refers to the percentage difference between the price at which the IPO shares are offered to investors and the price at which the shares are traded in the stock market afterwards. The studies provide evidence that Initial public offerings exhibit a high level of Under-pricing on the first day of trading on almost every stock exchange of the world and the studies identified several factors that affect the level of underpricing.
This study explores the level of underpricing of the IPOs of Nepalese stock market. It also attempts to find the effect of some explanatory variables in the level of underpricing and tries to find out their direction of relationship. Some of the variables taken are size of the firm, issue size, subscription rate, reputation of issue manager and market cycle. The study found that there is high level of underpricing (200.16 percent). The subscription rate, reputation of issue manager, market condition and firm size of the IPO is significantly positively related with the level of underpricing while issue size do not have significant impact on the level of underpricing in Nepalese stock market. |
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149/D | 332.632 SHR | Thesis/Dissertation | Uniglobe Library | Social Sciences | Available |