The Ideal IPO Candidate
Benefits of an IPO:
Liquidity
Visibility
Competitive positioning
Talent acquisition & retention
Great multiples
Governance & reporting requirements de-risks business
Ability to return easily to the Capital Market
Scale
Using stock as a currency for strategic partnerships, JVs & M&As etc. provides Strategic Flexibility
An IPO can Unlock Remarkable Value
Promoters & Management:
A Promoter determines the trajectory of a business. A promoter willing to invest resources on building a sound plan and efficient operations will be able attract quality capital and register robust growth over the long term. A willingness to adopt best practicess and technology is also critical.
Growth Potential:
The business should have room to grow over the long term. Only a buoyant sector will permit a business to expand and gain market share efficiently.
Capital Efficiency:
Long term profitability depends on a company’s cost structure. Good Planning, technology, efficient operations and effective management lowers costs - and increases Capital Efficiency.
Compliance:
Compliance Culture sets a company apart from its peers. Its central to protecting the company from business and regulatory risks. Quality investors insist on best practices. Good Governance positively impacts the value of a business.
→ Preparation is Key
Getting IPO Ready
Formulation of a sound Business Plan
Building Operational Efficiency & Resilience
Technology Adoption
Building Good Management
Establishing Good Governance
Building Good Stakeholder Communication
On-boarding quality anchor investors
Correct estimation of funding requirement
Related Reading:
SMEs contribute to over 30% of India’s GDP, 45% of industrial production, 40% of export and employ over a 100 million. SMEs face significant challenges on account of their size.