What is 'going public'?
- Securities of a privately owned company (generally ordinary shares) are offered for sale to the general public
What is 'Initial Public Offering (IPO)'?
- The first time securities of a privately owned company are offered for sale to general public
Role of Stock Exchange
- Stock exchange functions like a 'continuous auction' market. It facilitates consummation of transactions between buyers and sellers of securities/ bonds etc.,.
- To facilitate such trading, securities must be listed in a particular stock exchange- 'listing'.
- Listing regime- a range of standards on governance & investor protection
- Reviewing and approving of prospectuses
- Monitoring market disclosures by enforcing compliance with certain disclosure requirements
- set of conditions for listing imposed by a given stock exchange-minimum number of shares outstanding, minimum market capitalization, and minimum annual income
Key Advisors to IPO
- A variety of external advisors are required to complete IPO-Process
- Advisors include:
- Investment Bank
- Reporting Accountant
- External Auditor
- Legal Advisor
- PR Agency
- The Nomad
- Their roles are interdependent
- They need to work closely with each other as well as with the Company
- Company must appoint a senior management person to manage day-to-day coordination with advisors
- Going public is not merely compliance with regulatory framework or bringing a larger number of shareholders
- It is a paradigm shift in corporate mindset
Important areas for enrichment are-
- Corporate Governance
- Financial reporting
- Internal controls
- Risk management
- Regulatory compliance
- Legal structure and reporting lines
- Remuneration policies
- Related party transactions
- Orientation could potentially take up to 24 months or in some cases more
How can we help?
Horwath Mak with its extensive team of experts and vast industry knowledge that spans over 34 years can advise you throughout the transition process.