IPO as a tool to attract investment by enterprises of Ukraine

Abstract

It is indicated that certain contitions contributed to the development of cost approach to managing public companies.  Competition on the capital market is one of such conditions that should be pointed out. It manifests itself in sourcing investments in order to strengthen its competitive position. However it is emphasized that improvementof the investment attractiveness takes place because the increase in market value of the company and its shares allows shareholders (investors) to receive revenues that are implemented to increase the amount of their own capital. By increasing their value, enterprises form the preconditions for reducing the cost of attracting funding. It is specified that research in this area is carried out by logic circuits of value factors, one of which is an initial public offering (IPO) in the stock market. IPO is considered not only as a modern method of increasing the capital of the company and construction of the image in the international arena, but also asa way of forming its real market value. We suggest that public recognition of the company as a result of the listing of its shares involves not only public full access to information about its financial and economic activities, but also in the long term contributes to a growing interest on the part of market counterparties - from partners to investors, thus supporting its market value. To confirm the theoretical research it is analyzed the development process practice of floatation by Ukrainian companies on global stock exchanges.It is noted that for a public offering of its shares, domestic partnership choose one of the two sites - Warsaw or London Stock Exchange.The priority in making their choice is given to the amounts of expected investment and availability of requirements of companies-issuers.It is confirmed that the peak of popularity of IPO among Ukrainian enterprises and amount of capital raised has been in 2007. It is proved by statistics as for the rate of growth of investment during the period of 2005-2012.Sectoral structure of the investment demand growth is represented mainly by industrial enterprises. The study has determined the chain of causation: the level of competitiveness of the economy - the level of the stock market in the country - the level of competitiveness of the enterprise – determination of the actual fair value of the enterprise. The  analysis of the advantages and disadvantages of IPO by domestic enterprises, with emphasis on creating an enabling environment for investment by improving the regulatory legal framework of Ukraine on this issue. Scientific position are universal and can be applied to the entire set of innovative enterprises.