Determinants of Initial Public Offerings Subscription Level: Evidence from Egyptian Market

The main objective of this study was to identify the critical variables that affect the sum of money that investors pay to subscribe for an initial public offering (IPO) of a company listed on the Egyptian market. The vital need to understand the factors affecting IPO subscription levels, whether high or low, is the main driver for carefully examining this phenomenon in Egypt. The population from which the sample was drawn is the total number of IPO companies listed on the Egyptian stock exchange between 2005 and 2022, comprising thirty-nine companies. The study data were initially sourced from the Egyptian Stock Exchange Disclosure Department. To identify the factors that influenced the volume of investors' subscriptions during a company IPO, multiple regression analyses were conducted to examine the relationship between independent variables (offer price, issue size, firm age, financial leverage, return on assets, firm size, and market volatility) and subscription level. Ultimately, this study identified several significant relationships between the independent and dependent variables. There is a significant positive linear relationship between the IPO subscription level and issue size, firm size, firm age, profitability, and type of industry. Conversely, a significant negative relationship exists between subscription level and offer price, market volatility, and financial leverage.