FIRMS’ DECISION MAKING IN THE PROCESS OF IPO

Abstract

Purpose of research. The master’s thesis aims to represent and analyze the decision-making process of firms regarding Initial Public Offerings (IPOs) within 2022. The thesis addresses the critical determinants of successful IPO performance, examining the relationship between pre-IPO financial metrics such as debt/equity ratio, return on equity (ROE), and net income margin (NIM) with the percentage change in stock price post-IPO.

Research methodology. The study used linear regression analysis to explore the factors influencing the success of companies after Initial Public Offering (IPO).

Originality /value of research. The study makes significant contributions by exploring the complexities of IPOs in both developed and developing economies. It offers insights into the essential financial characteristics that contribute to successful IPO performance. This research is particularly valuable for companies in the electronics, information technology, oil and gas, and commodity fuel sectors, providing them with strategic guidance for navigating the IPO process in emerging markets.  

Research results. The study examined the pre-IPO financial metrics of companies in the electronics, information technology, oil and gas, and commodity fuels sectors. By comparing the stock price changes 30 days post-IPO, the study identified patterns and relationships between financial metrics and IPO success.

Findings. Based on the findings, the study provides several strategic recommendations for companies considering an IPO in emerging markets.