Initial Public Offering Services

 Taking your company public is an important milestone and signifies that it is reaching the point where it either needs more capital to grow or it wants to reward its investors. But a successful initial public offering is not easy and there are many steps that need to be taken before your shares can be traded on an exchange. Typically, a private company enlists the help of an investment bank known as an underwriter to set up its IPO. The underwriter acts as the primary market maker and will be responsible for determining the issue price, marketing the IPO to potential investors and assigning shares. The underwriter will also need to prepare regulatory filings and perform due diligence on the underlying business. A key document produced is a prospectus that will be used to describe the business, IPO purpose and dividend policy.

The IPO process is complicated and time-consuming, and companies should be ready to devote significant resources to it. Once the underwriter and the company are satisfied that all the regulatory requirements have been met, they will set the IPO price for the new shares. This is known as a price band and can vary between categories of investor, such as institutional buyers or retail investors like you. A lower price band would attract more institutional investors while a higher one might only appeal to retail investors.

Once the IPO price has been determined, the underwriter will then arrange for investment banks to commit to purchasing the IPO shares. This process is known as a book building approach, and it can be very competitive. Underwriters will take into account the size of the offer, current market conditions and business prospects to decide on a final pricing for the IPO.

After the price is determined, the underwriter will allocate the IPO shares to initial investors which are usually large institutional buyers. Retail investors may be involved as well depending on the company and the circumstances. Once all of the shares have been allocated, the company will then become listed and the stock will be able to trade on an exchange.

There are two major types of IPOs. The first, a fixed price offering, will have the underwriter, with the help of the lead manager or bookrunner, fix the share price for the initial offer. The other is a book building offering, where the company will set a range of prices and then determine the final price through analysis of confidential investor demand data compiled by the lead manager or bookrunner ("book building").

The underwriter will usually have multiple selling syndicates to cover different markets around the world. These syndicates are often led by Magic Circle and white-shoe firms that specialize in securities law. They will need to be able to comply with the various legal regulations in each market where they are selling. They will also need to have a team of specialists in each market to provide due diligence and advice.initial public offering services