IPO Determinants of Brazilian Companies

Abstract

The literature on Initial Public Offerings (IPO) is still little explored in Brazil, since the significant growth in the stock market occurred only recently. The purpose of this study is to identify the determining factors for the IPO of Brazilian companies, based on logistic regression methods and using a sample with private and public Brazilian companies. The results indicate that firms that undertook their IPO in the period were those that had been making significant investments, those that had the highest level of profitability and/or those that increased their level of indebtedness. The IPO was an alternative to improve the capital structure and/or raise funds to continue investing in their growth. The companies that went public were those that seized the opportunity offered in the period and the size of the companies was not significant for the IPO.

Keywords

• IPO
• decision to go public
• Brazilian companies