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Post-issue operating performance of firms in Nepal

Jas Bahadur Gurung & Dilli Raj Sharma

Investment Management and Financial Innovations2026https://doi.org/10.21511/imfi.23(1).2026.22article
AJG 1
Weight
0.50

What the paper says

Type of the article: Research ArticleAbstractThis paper aims to examine the operating performance of firms after new issues. Using financial data of 43 initial public offering (IPO) firms from 2013/14 through 2022/23 with 215 observations, operating performance is evaluated. Both the independent samples t-test and the Wilcoxon signed-rank test were used to compare firms’ operating performance between pre- and post-issue periods. Results reveal that operating performance after IPO for all indicators in different time windows from Year t+0 to t+3, has been negative compared to Year t–1. Sector-specific analysis shows that the decline in operating performance is significantly higher in the microfinance sector compared to hydropower firms. Underpricing has a positive effect on operating performance except in a few cases. Hot issue dummy has a negative, insignificant effect on both measures of operating performance, viz., operating return on assets and operating cashflow to total assets, for the first two-time windows, and it weakly supports the windows of opportunity hypothesis. On the other hand, the influence of promoter ownership on operating performance was positive except in few cases, which is contrary to the agency theory. Further, the results show that operating performance has a weaker influence on long-run IPO returns. Thus, it is proposed that IPO firms should strive to intensify their activities and effectively utilize capital raised through IPOs, considering the net present value of the projects to achieve better firm performance.AcknowledgmentsThis paper is prepared based on my ongoing PhD work. So, I would thank my supervisors, Professor Dr. Keshar J. Baral and Professor Dr. Dilli Raj Sharma, for their mentoring during my PhD. I also extend a deep gratitude to the University Grants Commission Nepal for providing me PhD Fellowship with the Award No. PhD-78/79-Mgmt-02. I never forget my friend Ramkrishna Chapagain, a research scholar at Delhi School of Economics, University of Delhi, for assisting me with several inaccessible resources for this study.

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https://doi.org/https://doi.org/10.21511/imfi.23(1).2026.22

Or copy a formatted citation

@article{jas2026,
  title        = {{Post-issue operating performance of firms in Nepal}},
  author       = {Jas Bahadur Gurung & Dilli Raj Sharma},
  journal      = {Investment Management and Financial Innovations},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.21511/imfi.23(1).2026.22},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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