ACTA UNIVERSITATIS DANUBIUS Vol 11, no 4, 2015 72 Financial, Public and Regional Economics The Projected Utilization of Initial Public Offer (IPO) Proceeds in Nigeria Bamidele M. Ilo 1 Abstract: Most young private firms use the Initial Public Offer (IPO) method to raise additional external equity fund to finance their growth and later create a secondary market for stocks. This study analysed the projected utilisation of IPO cash proceeds by Nigerian firms with a view to providing investors with information on the most critical areas that firms intend to channel those funds. The study used the cross-sectional data collected by Ilo (2012) on firms that issued IPOs from 1999 to 2009 on the Nigerian Stock Exchange (NSE). The data were analyzed using descriptive statistics such as, the means and percentage and analysis of variance. The results show that the average of IPO price is N19.09 per share. About 51% of the net proceeds is projected to be expended on business growth/ expansion and facility acquisition while 20 % is reserved for working capital needs to support the expansion. The initial investors are to enjoy a promoters’ cash-out of about 24% of the net cash raised. These projections are laudable investors should interpret the findings with caution since actual deployment of such funds may not necessarily conform with the projections except they are able to ensure adequate monitoring of the managers. Keywords: business expansion; IPOs; Market timing; net proceeds; projected utilization JEL Classification: G1; G2 1. Introduction The Nigeria capital market is still at its infancy given the available indices relative to is age. The Nigeria Stock Exchange (NSE) was established in 1960 as the Lagos Stock Exchange and commenced operations in 1961 with 19 stocks. The market as at December 31, 2012 had only 198 quoted companies with a total market capitalization of N8.9trillion ($57billion). Usman (1998) observed that thirty five years after the existence of the NSE, only 184 equities were quoted, a number he considered relatively small compared with other emerging markets in Asia and Latin 1 Lecturer, Department of Accounting, Banking and Finance Faculty of Social and Management Sciences, Olabisi Onabanjo University, Nigeria, Address: P.M.B 2002, Ago-Iwoye, Ogun State, Nigeria, Tel.: 08055008556, Corresponding author: bammyinspiration@gmail.com. AUDŒ, Vol. 11, no. 4, pp. 72-85