mailto:uumlib@uum.edu.my 24x7 Service; AnyTime; AnyWhere

Anticipated and actual use of capital raised in Malaysian IPO Market

Badru, Bazeet Olayemi and Ahmad Zaluki, Nurwati Ashikkin and Wan Hussin, Wan Nordin (2016) Anticipated and actual use of capital raised in Malaysian IPO Market. Studies in Business Economics, 19 (1). pp. 34-49. ISSN 1818-1228

[thumbnail of SBE 19 1 2016 34 49.pdf] PDF
Restricted to Registered users only

Download (7MB) | Request a copy

Abstract

This study investigates the anticipated and the actual use of capital raised from initial public offering (IPO) in Malaysia. The descriptive analysis shows that companies anticipate the use of capital mainly for growth opportunities (47%), working capital (27%), debt repayment (12%) and listing expenses (13%). Further analysis indicates that 54% of IPO companies have dedicated more than 50% of the amount of capital raised for growth opportunities. Very few companies planned to use the capital raised for research and development (R&D) and marketing activities. The regression results also confirm that the anticipated use of capital for R&D and marketing have no significant relationship with total amount of capital raised. In addition, a content analysis of the chairmen’s statements and the section dedicated for actual use of capital raised in the annual reports reveal that majorly 73 out of 121 companies’ exhibit changes in the anticipated use of capital raised. Therefore, this study concludes that relevant parties in the IPO process (e.g., regulators, issuers, financial intermediaries and investors) should pay close attention to the anticipated and actual use of capital raised.

Item Type: Article
Uncontrolled Keywords: Anticipated use, actual use, growth opportunitcs, working capital, debt repaymend IPO proceeds.
Subjects: H Social Sciences > HB Economic Theory
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 01 Apr 2019 00:42
Last Modified: 01 Apr 2019 00:42
URI: https://repo.uum.edu.my/id/eprint/25802

Actions (login required)

View Item View Item