IPO Listing Support

An initial public offering, or IPO, is the process by which a private corporation makes its shares initially available to the general public. A business can get equity money from the general public through an IPO. Since the move from a private to a public firm usually entails a share premium for existing private investors, it can be a significant moment for private investors to completely realize rewards from their investment. In the meantime, it permits participation in the offering by general investors.

How is a company affected by an IPO?

Ability to raise funds

For a business, an IPO is a fantastic way to raise inexpensive capital. A corporation may require substantial funding in order to expand and scale. Obtaining substantial amounts via banks or other financial organizations is challenging. Additionally, there are restrictions and interest charges associated with debt capital. By way of IPOs, on the other hand, a business raises equity capital without incurring interest charges.

Costs

IPOs come with a lot of related expenses. A company will have to pay underwriter fees, transaction costs, administrative costs, and other expenses during the IPO listing process. In order to entice investors to subscribe to the issue, a company must also invest in advertising for the IPO.

Equity dilution

A company's decision to go public through an IPO somewhat dilutes the original investors' total stake. An investor becomes a shareholder of the business when they contribute to an IPO. They now own stock in the business as a result.

Better public image

An IPO typically helps a firm since it gives investors a better impression of the company. A corporation must be open and responsible to investors and regulators in order to be listed on stock exchanges. Additionally, listed businesses must fulfill the prerequisites.

IPO Listing Eligibility

In order to be eligible for an IPO listing, a company has to meet certain criteria set by SEBI:

• The paid-up capital should be greater than Rs 10 crore
• The total capitalization of equity should not be lesser than Rs 25 crore

A company should also adhere to the rules and laws of the:

• Securities and Exchange Board of India Act, 1992
• Securities Contracts (Regulations) Act of 1956
• Companies Act 1956/2013

A three-year record of the company's promoters, the converted partnership firm, or the applicant who submitted an application for an IPO listing must also be provided by the issuing company.

Benefits of IPO

IPO investments offer multiple benefits to an investor. Check out some of these:

Be an early investor

The opportunity to invest in a business at the beginning of its growth cycle is one of the main advantages of an initial public offering (IPO). Investors that think a company has a strong future growth potential can apply for its initial public offering (IPO).

Better transparency

The demand for accountability and transparency among the companies listed on the stock exchange makes investing in initial public offerings (IPOs) beneficial. Companies are required to declare and furnish investors with information on a regular basis, including financial reports, firm investments, and shareholding patterns. Investors are safer when they invest in regulated securities.

Listing gains

Investing in initial public offerings (IPOs) can also be a smart method to make money quickly. An IPO that is in strong demand will list at a premium on the stock exchanges. These premiums occasionally give investors a substantial return.

Shareholder rights

The investors who receive shares after the IPO listing process become the company's shareholders or co-owners. They can now vote on issues pertaining to the company's operations thanks to this. Additionally, dividends from the company's profits are due to the shareholders.

IPOs are a very helpful instrument for investors as well as businesses. While initial public offerings (IPOs) present numerous advantages to investors, their performance following listing on stock markets varies. Therefore, before making an investment in an IPO, it is recommended that an investor conduct in-depth research on the company, its management, and its business plan.

How can SKMC Global assist you?

As service providers, we assist businesses in navigating the many stages involved in going public, which is a critical part of the Initial Public Offering (IPO) process. This is how we can help:

Preparation and Planning and Advisory Services:

In addition to evaluating the market, readiness, and value, we offer strategic advise on whether an IPO is the best course of action for the business. Help with the preparation of important documents, including financial statements, the prospectus (also known as the red herring prospectus), and other necessary disclosures.

Regulatory Compliance:

We make sure the business complies with all legal and regulatory standards established by securities regulators, such as the Securities and Exchange Commission (SEC) in the United States and the Securities and Exchange Board of India (SEBI) in India. We take care of submitting required paperwork and files to regulatory bodies.

Financial and Tax Advisory:

In order to comply with regulatory requirements, our team prepares and audits financial statements, helps determine the company's value and the price range for the IPO shares, and offers advise on the tax ramifications of going public as well as how to structure the IPO to minimize taxes.

Underwriting and Placement:

We facilitate the book-building process, which measures investor interest and establishes the ultimate offering price. We offer advice on investing in banks, and underwriters oversee the initial public offering (IPO) process, which includes share pricing, marketing, and sales.

Marketing and Roadshows:

Develop and implement a marketing plan to draw in potential investors. Arrange and carry out roadshows when company officials address prospective investors in an effort to spark interest in and demand for the IPO.

Legal and Regulatory Filings:

Our legal team assists with the development and completion of the prospectus, which offers comprehensive details about the offering, the company, and its financials. We make that the business complies with disclosure and reporting standards, as well as any regulatory needs.

Post-IPO Support:

If required, we support the management of investor relations and communication following the initial public offering (IPO) in order to preserve goodwill with shareholders and assist in stabilizing the stock price using a variety of market stabilization strategies.

Corporate Governance:

In order to comply with regulations for public companies, we offer advice on creating or improving corporate governance structures and procedures. We support the establishment of the board of directors and any required committees, such as the audit and pay committees. Our legal team will make sure that all securities rules and regulations are followed going forward, including regular reporting and disclosure requirements.

Companies can more successfully negotiate the difficulties of the initial public offering (IPO) process by utilizing the experience of SKMC Global's team. This will ensure a successful IPO and a seamless transition to becoming a publicly traded company.