A comparative evaluation of the performance of initial public offerings of private and state-owned companies at the NSE
This research sought to document, analyze and compare the IPO performance of privately-owned and government-owned companies at the NSE. The population of the study consisted of all initial public offers of common stock at the NSE during the period 1984-2008. A total of 14 privately-owned and 7 government-owned companies were included in the study. The findings of the research indicate that both the IPOs and PIPOs were heavily underpriced. The mean adjusted abnormal return of the IPOs was 9.79% with a standard deviation of 12.6 while PIPOs experienced a mean adjusted abnormal return and standard deviation of 22.219% and 14.71 respectively. In the long-run, both the IPOs and the PIPOs registered negative returns with the latter been more negative indicating long-run underperformance. The two null hypotheses were rejected because the table values of t at 5% level of significance for both the short-run and long-run were less than the calculated values of t therefore indicating that there is a significant difference in the initial and MBHR of initial public offerings of state-owned and privately-owned companies. This research will hopefully enrich finance literature and provide significant contribution to previous findings and be of invaluable importance to investors.