Perception of Investors towards Initial Public Offering (IPO) in Nepal

Abstract

Investment in stock market helps to mobilize which in turns helps in development of the economy. Investment in shares will be started from primary market through the purchase of Initial Public Offering and further will be traded in secondary market. The investor can buy and sell the existing shares at the market price in the Nepal Stock Exchange. In Nepal, billions of capitals is raised every year through IPO. Nepalese investor seems to be highly attracted towards the IPO market. This research entitled perception of investors towards initial public offering (IPO) in Nepal. The main purpose of the study is to examine perception of investor towards IPO, to analyze the relationship between different factors (Quality management, Company Goodwill, Company performance, Company sector and Market information) and investment decision and to examine the impact of such factors on investment decision in IPO. The research is primarily based on primary data. Data was collected from 145 respondents who were connected at five different brokerage firm at Kathmandu district. The descriptive and inferential analysis was preferred in SPSS by using statistical tools such as mean and standard deviation. Similarly, correlation and regression analysis were also used to analyze the relationship between variables and impact of different factors on investment decision (dependent variable). The study revealed that Quality management, Company goodwill, Company performance, Company sector and Market information are the highly considerable factors before making investment decision in IPO. From the study it is found that the value of R 2

is 0.698 which means that 69.8 % variation in investment decision is explained by the independent variables. However, the remaining 30.2 % is still unexplained in this research. Furthermore, it explained that there was positive correlation between the factors considering investment decision at 1% level of significance. Finally, investor should aware about all the factors before making investing decision.