Initial Public Offering (IPO)
An initial public offering (IPO) is the first public offering of shares of a private company to the investing public.
Through an IPO, a company can offer existing or newly issued shares to professional and retail investors, company employees, strategic partners and others. In return, the company commits to high standards of corporate governance and public disclosure. This raises the profile and level of trust in the company, making it easier and cheaper to access capital. Clearly defined corporate governance procedures and transparency requirements are one of the fundamental criteria for investors to choose to invest in such companies.
Through an IPO, a company can offer existing or newly issued shares to professional and retail investors, company employees, strategic partners and others. In return, the company commits to high standards of corporate governance and public disclosure. This raises the profile and level of trust in the company, making it easier and cheaper to access capital. Clearly defined corporate governance procedures and transparency requirements are one of the fundamental criteria for investors to choose to invest in such companies.
IPO preparations
Before making a final decision on an IPO, companies usually consult the listing sponsor (a bank or investment firm) to determine how much capital they want to raise through the IPO, what ownership structure they want to have after the IPO, etc.
Through an IPO process an initial offering price is established. The company, together with its adviser, analyzes how much money it wants to raise, which investments will be financed with these funds and what is the opinion of the existing owners (whether they want to partially withdraw from the investment, what market valuation is acceptable for them, etc.). A chosen advisor prepares an independent overview of the company, while the company itself and its management prepare to improve and apply best practices in corporate governance.
During the initial meetings with potential investors for the IPO, the company's management may be confronted for the first time with questions related to the company's strategy, competition, quality of management, financial ratios, etc.
Through an IPO process an initial offering price is established. The company, together with its adviser, analyzes how much money it wants to raise, which investments will be financed with these funds and what is the opinion of the existing owners (whether they want to partially withdraw from the investment, what market valuation is acceptable for them, etc.). A chosen advisor prepares an independent overview of the company, while the company itself and its management prepare to improve and apply best practices in corporate governance.
During the initial meetings with potential investors for the IPO, the company's management may be confronted for the first time with questions related to the company's strategy, competition, quality of management, financial ratios, etc.
Preparing a Prospectus
Before an IPO and before listing financial instruments on a regulated market a prospectus must be prepared and published, after being pre-approved by the competent authority (in Slovenia: Securities Market Agency).
Prospectus is a document detailing all information regarding the issuer and rights arising from its shares to be offered through an IPO or listed on a regulated market. Prospectus enables interested persons, especially retail investors, to objectively assess involved risks and take their investment decision.
Prospectus is a document detailing all information regarding the issuer and rights arising from its shares to be offered through an IPO or listed on a regulated market. Prospectus enables interested persons, especially retail investors, to objectively assess involved risks and take their investment decision.
Promotion
Promotion of an IPO is being done through presentations to investors (road-shows) or individual meetings (one-on-one). Companies wishing to attract foreign investors often pursue such promotions outside Slovenia as well. Public invitation of offers or an extract of the prospectus with most important information regarding the IPO is published in the media as well. An invitation usually mentions at least the number of offered shares, price or price range per share and a deadline until which the offers shall be submitted.
Going public
After IPO the company applies for listing on the regulated market of Ljubljana Stock Exchange.
During an IPO process LJSE offers its SEOnet service to involved companies, enabling fast and wide distribution of all news and announcements regarding the IPO to wider public.
You are welcome to contact upravljanje-trgov@ljse.si for all questions regarding listing of shares on Ljubljana Stock Exchange and using our SEOnet service.
During an IPO process LJSE offers its SEOnet service to involved companies, enabling fast and wide distribution of all news and announcements regarding the IPO to wider public.
You are welcome to contact upravljanje-trgov@ljse.si for all questions regarding listing of shares on Ljubljana Stock Exchange and using our SEOnet service.
