Planning to Go Public? Follow these Tips for a Successful IPO
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The reason to go public can be anything - whether for better liquidity or to give an exit to a private equity investor, the event is considered as one the most important milestone of a company.
Entrepreneurs, promoters and the senior management work day in and day out for months aiming for successful IPO and while some make headlines; others just fail to catch investors’ attention.
If your company is planning to hit the capital market soon, here are some tips that will help you build a reputation and gain traction during the IPO.
Change in Mindset
Munish Agarwal, Director- Capital Markets, Equirus Capital feels that an IPO is just the beginning of a journey for the company and hence the promoters should focus on changing the thought processes of the venture.
“Promoters looking for listing their companies need to keep in mind that a change in the mindset required from being a private entity to a publicly traded and owned entity along with having a fair and equitable approach to all shareholders,” Agarwal shared while adding that, “The Company needs to bolster its internal controls and compliances, streamline financial reporting processes and audit. They should be prepared to scrutiny from regulators to minority shareholders.”
Create Value with Restructuring
For a successful IPO, first-time issuers should understand if they hold enough value for investors and a chance to create wealth for themselves. This also applies to smaller companies that are hitting the capital market through the SME platform.
Additionally, Shailendra Kumar, CIO, Narnolia Financial Advisors says,“In a group where there are several companies working in the same sector or part of the same industry, it is ideal for the promoters to carry out a restructuring and bring all businesses under one flagship company either through merger or through a holding subsidiary structure.”
At the end of the day, a company should be clear about the objective of the issue as for any change, later on, shall require extensive clarification to SEBI, Stock Exchanges and the Registrar of Companies.
While on the other side, Amishi Kapadia, Senior President & Global Head, YES Securities believes for the success of an IPO, a company requires robust business infrastructure, sound financial performance and a competent management with good corporate governance practices.
Investors generally favour companies with scalable business models and clearly outlined growth strategies.
“Going public requires the transformation of the organization’s systems, structures and culture. Onboarding an experienced team of advisors is critical for the right positioning of the company’s equity story and ensures that it is well prepared in all aspects to seamlessly hit the markets,” she advised.