DETERMINANTS OF FPO IN NEPALESE STOCK MARKETS

Abstract

This research explores the factors influencing SEO value (LnSEO Value) in the Nepalese stock market, concentrating on five primary independent variables: Return on Assets (ROA), Market-to-Book Value Ratio (MTBVR), company size (LnSIZE), Leverage Ratio (LR), and Cash Dividend Ratio (CDR). The study uses secondary data from the annual reports and financial websites of 10 companies that conducted Follow-on Public Offers (FPOs) between 2013/14 and 2022/23, applying both descriptive and causal research methodologies. Descriptive statistics indicate considerable variability in the data, particularly in company size, leverage ratios, and cash dividend ratios. The correlation analysis reveals that LnSIZE has the most substantial positive relationship with SEO value, implying that larger firms tend to have higher SEO values. Conversely, ROA, MTBVR, LR, and CDR show weaker or statistically insignificant correlations with SEO value. Regression analysis confirms these results, showing positive but non-significant associations between the independent variables and SEO value. These findings imply that while some variables exhibit positive relationships with SEO value, none of these relationships are statistically significant, suggesting the need for further research to identify additional factors that may influence SEO value.