FACTORS INFLUENCING SUBSCRIPTION OF IPO IN BANGLADESH

Due to huge loss in the secondary market during the 2010-2011 stockmarket crash, small investors in Bangladesh involved themselves in IPOinvestment. This study, based on secondary data, depicts the IPO market inBangladesh and also identifies the factors influencing IPO subscriptiontimes. The study documented 85% growth in the listed companies on theDhaka Stock Exchange (DSE) through IPO during the last decade with anaverage number of 14.80 IPOs per year. Fixed price method was followedin most of the IPOs; whereas the book building method was followed inonly 2.70% of IPOs. Earnings forecast, a very common phenomenon of IPOprospectus in developed countries, was hardly ever found in the IPOprospectus in Bangladesh. Multiple regression model indicates that marketlot has significant positive, whereas EPS and offer price have insignificantnegative influence on IPO subscription times. The current study hasexplored the existing scenario of IPOs in Bangladesh that will helpregulators to undertake proper course of action in developing the stockmarket in Bangladesh. The study will help issuers assessing the potentialsubscription condition of an IPO candidate company and also contribute tothe existing stock of knowledge.JEL Classification: G01, G11, G24, G28, K22