TY - JOUR ID - 124841 TI - Exploration of IPO Motives, Oversubscription and Flotation Costs: Evidence from Bangladesh JO - International Journal of Management, Accounting and Economics JA - IJMAE LA - en SN - AU - Rahman, Md. Tahidur AU - Hossain, Syed Zabid AU - Haque, Md. Anwarul AU - Ashik, Md. Abu Hanif AD - Department of Business Administration, Bangladesh Army International University of Science and Technology, Cumilla, Bangladesh AD - Department of Accounting and Information Systems, University of Rajshahi, Rajshahi, Bangladesh Y1 - 2020 PY - 2020 VL - 7 IS - 12 SP - 708 EP - 725 KW - IPO motives KW - primary market KW - Book-building, IPO proceed utilization, Bangladesh capital market DO - 10.5281/zenodo.4482755 N2 - This study intended to explore the IPO motives and the factors that contributed to IPO oversubscription in Bangladesh. Based on hand-collected data from 101 sample IPO prospectus during 2010–19, the study found an average of 10 IPOs per year, mostly (90%) through the fixed-price method. Among the sample companies, 34.7% were in the textile sector, followed by 17.8% in the engineering sector and 12.9% in the pharmaceuticals & chemical sector. This study observed an average subscription times of 23.41, which was much lower than in some other South Asian countries. Regarding the use of IPO proceeds, loan settlement was the prime motive, followed by capital expenditure, and working capital financing. Companies expensed around 6% of the total IPO proceeds as flotation cost. Although the detailed disclosure of the use of IPO proceeds in the prospectus is a common and expected feature, it was found absent in around 12% of companies. The logistic regression model found a statistically significant influence of lot size (LOT), post-IPO capital (PIC), and flotation cost (FTC) on oversubscription times (OST). The contribution of FTC to OST was a novel finding of this study. The study also found the absence of large and reputed domestic and multinational conglomerates in the listing through IPOs. Thus, the current study recommends regulators should take proper drives to customize and familiarize the book-building method, which can entice good companies for listing in stock exchanges through IPO. UR - https://www.ijmae.com/article_124841.html L1 - https://www.ijmae.com/article_124841_ea5df4c4ff202adf40f9820194996699.pdf ER -