IPO Timing Determinants: Empirical Evidence on the Polish Capital Market

Abstract

This paper examines the determinants influencing the IPO timing by enterprises under the conditions in force on the Polish capital market. In the study we asked CFOs Polish enterprises divided into two groups to formulate their insights in the area of IPO timing. The first group consisted of the entities that have previously executed an initial public offering, the second one included the entities that have not executed an IPO (but considered doing so in the past or were candidates for doing it in the future). The survey results can be summarised as follows. First, in choosing an opportune time for an IPO, both subsamples of companies take into considerations the current need of external equity capital for continuing their growth. Second, managers also take advantage of macroeconomic development and effort conducting IPOs when present and projected state of the national and global economy is favorable. Overall stock market conditions, conditions in the business sector and investors interest in the business sector were identified as determinants of IPOs timing with a very strong support. Finally, Polish CFOs attach less importance to the interest that other companies operating in the same type of business may have in IPOs. The interest that firms from other business sectors may have in going public does not have an appreciable effect on timing as well.This paper examines the determinants influencing the IPO timing by enterprises under the conditions in force on the Polish capital market. In the study we asked CFOs Polish enterprises divided into two groups to formulate their insights in the area of IPO timing. The first group consisted of the entities that have previously executed an initial public offering, the second one included the entities that have not executed an IPO (but considered doing so in the past or were candidates for doing it in the future). The survey results can be summarised as follows. First, in choosing an opportune time for an IPO, both subsamples of companies take into considerations the current need of external equity capital for continuing their growth. Second, managers also take advantage of macroeconomic development and effort conducting IPOs when present and projected state of the national and global economy is favorable. Overall stock market conditions, conditions in the business sector and investors interest in the business sector were identified as determinants of IPOs timing with a very strong support. Finally, Polish CFOs attach less importance to the interest that other companies operating in the same type of business may have in IPOs. The interest that firms from other business sectors may have in going public does not have an appreciable effect on timing as well.