Strategic Considerations for an Effective IPO Planning

Capital Markets CIO Outlook | Friday, July 26, 2019

An Initial Public Offering (IPO) can be a superior path and strategic option to finance development and access deep pools of liquidity for private businesses wishing to increase capital.

FERMONT, CA: Entrepreneurs, promoters and senior management operate on a day-to-day basis for months aiming for effective IPO and while some create headlines, others fail to capture the attention of investors. Here are some tips to assist in creating a reputation during the IPO and gaining traction.

Change in Mindset

IPO is just the start of the company's journey, and the promoters should, therefore, concentrate on altering the company's planning procedures. Promoters seeking to list their businesses need to focus on the shift in mentality from a private organization to a publicly-traded and owned organization, along with a fair and equitable strategy for all shareholders, is necessary. The company requires strengthening its inner controls and compliances, streamline, and audit procedures for financial reporting. They should be willing to scrutinize minority shareholders from regulators.

Create Value with Restructuring

First-time issuers should know if they hold sufficient value for investors and an opportunity to generate wealth for themselves for a successful IPO. This also applies to smaller firms that use the SME platform to hit the capital market. A business should be clear about the issue's goal as any changes will later require comprehensive clarification from SEBI, Stock Exchanges, and the Company Registrar.

Corporate Governance

A company needs solid business facilities, sound economic results, and excellent corporate governance procedures for the achievement of an IPO. Investors usually favour businesses with scalable business models and growth policies outlined.

Going public involves transforming the systems, structures and culture of the organization. The onboarding of an experienced team of advisors is critical to the correct positioning of the equity story of the company and ensures that it is well-prepared to hit the markets in all aspects seamlessly.

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