Hello, I am looking for someone to write an essay on Initial Public Offerings in Saudi Capital Market: Applicability of Under-Pricing and the Respective Model. It needs to be at least 3500 words.Downl

Hello, I am looking for someone to write an essay on Initial Public Offerings in Saudi Capital Market: Applicability of Under-Pricing and the Respective Model. It needs to be at least 3500 words.

The paper tells that with the privatization movement of the government there were a large number of companies that have resorted to Initial Public Offerings for raising capital for their setting up and expansion needs. Such IPOs were oversubscribed in the range of 3 to 12 times. This indicates either such oversubscriptions were due to excessive money supply or the IPOs were under-priced. According to Experts Web site an Initial Public Offering (IPO) "is the first sale of a corporation's common shares to public investors." While IPOs offer an attractive mode of raising capital for the companies, they also involve adhering to a number of regulations. The requirements for reporting also make them more complicated. The stock market, where the IPOs are generally made is known as the primary market and any subsequent public offering of shares by the companies will be made only in the secondary market. The companies desirous of issuing IPOs usually enter into a contract for the sale of its shares with one or more investment banks known as 'Underwriters'. The function of the underwriters is to approach the investors with offers to sell the shares of a particular company that wants to make an IPO. Such a contract may be entered into by a single investment bank or a syndicate of them comprising more than one, in which case there will be a 'lead underwriter'. In consideration of selling the shares of the company to the public, the underwriters get a percentage commission on the total value of the shares they sell. The sale of IPO may take several forms like Dutch Action or Firm Commitment to name a few which are common methods of marketing the IPOs. The issue of IPOs by companies carries some advantages like:

Lower cost of Capital: the company would be able to raise the capital required at a lower cost by issuing IPOs as compared to that of borrowing or any other form of raising capital

The liquidity for the shares of the shareholders of the company is drastically increased as the shares in the IPOs are immediately traded on the stock exchanges

By making the additional capital available cheaper and also quicker, the IPOs give the companies enough opportunities to expand their operations

The issues of IPOs often increase the image of the company. The IPOs are not left without disadvantages. Some of them according to Amvest Financial Group are: The regulatory provisions and the reporting requirement make the IPOs incur additional expenses and make them cumbersome too. IPOs lead to loss of confidentiality and management control due to dilution of shareholding. there is a continuous pressure from the shareholders to enhance the share value. sometimes there will be restrictions on the sale of stocks.