The road to becoming a listed company: step by step

There are several different incentives for an IPO/listing. Being listed makes it easier for a company to raise new capital from the capital market, enables the company to use its own shares as payment in the event of acquisitions, enables share-based incentive programmes, improves recruitment opportunities and results in the company’s shares becoming liquid and convertible into cash; in other words, it provides an exit option for existing shareholders.

Becoming listed is also a company’s seal of quality as the listing places high demands on the company’s provision of information to the market and increases its transparency. This can also help raise awareness of the company and its products or services. Regardless of why a company chooses to list its shares, the IPO process will be relatively long and resource-intensive for the company. This is why it is important for the company to start preparing its IPO process well in advance and to start allocating sufficient resources for the project.

Below is a brief description of what an IPO process may look like.

START

The company is evaluating its interest in – and the possibility of – carrying out a listing and adopting preparatory measures (e.g. a pre-IPO/IPO readiness assessment)

1.

Adviser(s) are chosen

Initial meeting with the stock exchange/marketplace

Exchange auditor/certified advisor/mentor is chosen and its review process initiated

2.

Review of the organisation, including financial reporting, disclosures to the market and corporate governance, and adaptations to meet the listing requirements

The due diligence process begins

Work with a prospectus/company description/information memorandum

Euroclear affiliation begins (if the company is not already a VPC-affiliated company)