The effects of initial public offering on the financial performance of companies listed at the Nairobi securities exchange
Abstract
This research investigates the change in performance of firms in Kenya as they make the
transition from private to public ownership through initial public offerings (IPOs). The
study compares the performance of the firms before and after going public.
The performance of firms from previous study has shown a decline on the post- issue
operating performance. This study confirms that the same still holds in Kenya. The study
examined 6 Kenyan IPOs issued on the NSE from 2002-2012. The study compares the
pre-issue financial performance against the post-issue financial performance of the 6
Kenyan IPOs. The study will adopt a descriptive research design. Descriptive analysis
will use the mean and standard deviation to measure the variables. The study measures
the decline on financial performance by use of ratios; it used the return on assets, return
on sales, current ratio and fixed asset turnover ratio.
Publisher
University of Nairobi