Factors affecting performance of initial public offering ( IPO) in nepalese companies

Abstract

An Initial Public Offering (IPO) occurs when a security is sold to the general public for the first time, with the expectation that a liquid market will develop. An IPO can be of any debt or equity security This study aims to examine the relationship between quality management, company goodwill, performance, sector, market information, and public response to the stock market in Nepal, with a focus on how these factors influence IPO performance. Employing a descriptive and causal-comparative research design, primary data were collected from a sample of 400 respondents from banks and brokerage firms using a non probability, convenience sampling method. In this research, company sector, income, company goodwill, market information, and company performance serve as independent variables, while public response acts as the dependent variable. Correlation analysis revealed significant positive relationships between IPO performance and all variables except market information, with the strongest correlations observed for quality management (r = 0.775) and company performance (r = 0.568). Regression results further indicated that quality management (β = 0.276, p < 0.001), company goodwill (β = 0.089, p = 0.014), company performance (β = 0.517, p < 0.001), and company sector (β = 0.102, p = 0.012) significantly predict IPO success, whereas market information had no significant impact (p = 0.189). The findings highlight the necessity for Nepalese companies to prioritize strategic quality management, sustain robust operational performance, and strengthen goodwill to achieve better IPO results.

Keywords: Quality Management, Company Goodwill, Company Performance, Company Sector, Market Information