Factors Influencing Investors Investment in Initial Public Offering
Introduction – An initial public offering is the sales of company’s stock to the public for the first time. The primary impetus
for an IPO is generally either to rise capital or to offer an exit strategy. In fact the firm in most incipient stage of
development generally relies entirely on personal loans, saving, family and friends for their initial financing. The reason for
IPO issues are following
Research Methodology – The present study follows a descriptive research design, with structured questionnaire as
information collection tool. The respondents for the study were the investors of Surat City who are investing in IPOs. The
respondents were selected using a non-probability convenient sampling technique. The analysis of the data is done by using
descriptive as well as inferential statistics.
Major Findings – The analysis of the data reveals that majority of the investor’s takes broker’s advice while investing in
IPO and the major problem faced by the investors is delay in refund and lack of clarity in allotment. The factor analysis
states that there are three major factors that influence investors while investing in IPO are Company Philosophy, Future
Prediction and Projection, News relating to company IPO and Financial Performance.
Managerial Implications – The outcome of study could be considered by brokering firms, issuing companies and investors
as inputs for more focused services.
Keywords - Initial Public Offerings, Investors, Problems, Factors