Abstract
Purpose - This article examines Nepalese retail investors' FPO subscription
factors. This paper uses conventional and behavioral finance to investigate the
influence of company specific, behavioral, and market factors on investment
decision in follow-on-public offers in the context of Nepal.
Design/methodology/approach - Design in the cross-sectional survey, 395
investors in Nepal with share market expertise were surveyed. Structured
questionnaire was used to collect data. Data were analyzed using descriptive
statistics, structural equation model, correlation analysis, reliability tests, and
multiple regression using SPPS and AMOS-26.
Findings - Market circumstances and behavioral factors positively affect
FPO investment choices, but company-specific variables lose relevance in
multivariate analysis. Behavioral aspects have the most important impact,
demonstrating that investor psychology, peer effect as well as prior experience
and fear of losing out strongly affect real subscription choices. Conversely,
company-related information only gains relevance at descriptive and bivariate
levels; investors nevertheless accept fundamentals.
Conclusion - Results exhibits that FPO investment adoption are primarily
directed by behavioral heuristics rather than corporate fundamentals, suggest
that investors psychology and social dynamics effectively dominant financial
matrices. Subsequently, investor appear less sensible about companies’
specific factors, such as financial performance, corporate governance, and
growth potentials.
Implication - The study contributes to the literature on Nepal-specific
stock follow-on issuance and has practical consequences for offering firms,
regulators, advisers, and retail investors.
Originality/value - Absence of substantial empirical evidence, this study
provides an exclusive empirical analysis of FPO subscription behavior in
context of Nepal by incorporating traditional and behavioral finance.
Keywords - Behavioral factors, Equity investment, Follow-on public offers
(FPO), Investment decisions

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