A Journey Towards Initial Public Offering (IPO)

The Decision to Go Public

It is important for companies to determine their main objectives and the benefits that they can obtain first.

A Public Offering is when a company undertakes its initial public offering, IPO, by selling shares of stock to the public, usually to raise additional capital. It is regulated under UUPM No. 8, 1995.

Finding the Right Reasons

The following are several possible reasons why companies would want to go public:

1. To raise capital for operation and/or expansion
2. To fund strategic action plans such as M&A or a strategic alliance
3. To attract and retain human capital
4. To strengthen a company’s position in the market
5. To exit or partially sell their share of the company
6. To provide liquidity to shareholders/investors

Publicly traded companies need to actively maintain their reputation by engaging in regular communication with investors, analysts, and the financial media.

The public’s perception of the company directly impacts the value of its stock, and this influence should not be underestimated.

Embracing the responsibilities of being a public company involves becoming accustomed to the rhythm of quarterly and annual reporting obligations, as well as requirements submissions frequently to the Authorities.

Key Factors to be taken after Going Public

The IPO is not the end of the story – It is only a beginning

Publicly traded companies are obligated to adhere to various reporting and other requirements.

One of the most notable changes for many companies is the requirement to expedite the closure and public reporting of their financial results.

It is crucial that the company is thoroughly prepared to meet these accelerated timeline requirements, as failure to do so can shake investor confidence and affect the share’s price.