Post on 21-Apr-2017
Arie Kravtchin
Director of Investment Banking, Bank of America Merrill Lynch
Roadmap to
SUCCESSFULCase study from Eduson.TV
course
IPO
The important factors are barriers to entry, state of
the securities market and the region’s economy upon
the whole. Sometimes, the conditions are such that it
makes sense to postpone IPO. Foe example, in the
summer of 2013, the management of Azul Brazilian
Airlines decided that the market conditions were too
unfavorable - Sao Paulo stock exchange index dropped
by 18% and the prices of their competitor’s stocks
dropped by 35%. Therefore, the planned IPO was
postponed for an indefinite term.
appropriate time to launch an Ipoit is important to choose
Usually, the entire process takes from 3 months to 1
year. It generally depends on the company’s
preparedness level and, above all, on the availability of
audited financial statements for the last three years
of work.
must be started «Long before»preparation for IPO
for organizational expensesbe prepared
On average, a company spends more than $1 mn when
preparing to IPO (listing fee, legal and financial
consulting, etc.). As soon as stock trading begins,
expenses become even higher - $1.5 mn on the
average (for audit, Board of Directors, new personnel,
PR, etc.).
The factors that operated to the advantage of the
IPOs when they were launched will most probably be
relevant for your company, too: investors’ readiness to
risk, interest towards your sector of industry, etc.
Of successful ipos in the current year
You should look up to the experience
The organization to be engaged in public offering
(which is often an international investment bank),
should have appropriate experience and relations with
potential investors. This will help create a demand for
company’s stock offering. Naturally, the book-runner
must not at the same time provide the same services
to your competitors.
thoroughly
choose your book-runner
Large-scale transactions more often attract a larger
number of investors, especially big ones. At the same
time, it may be more difficult for the management and
book-runners to create a high demand at the stage of
book building.
a right ipo amount
it is right to set
Investors highly rate the company assessment by
outside specialists: how well the company is managed
and whether the business plan is viable, what the IPO
goals are, whether there are any competitive
advantages and whether the company’s sector is
growing.
of the company
collect expert opinions
Clarity of the company’s business scheme and of its
assets structure is not only required for defense
against tax and other claims. An impeccable
reputation will attract investors that are not
inclined to risk.
perform the due
diligence
Direct contact is crucial for the company’s promotion.
Therefore, you should perform «rehearsals» of
presentations during the road-show and thoroughly
plan your behavior strategy.
the management is to meet
the investors before
ipo and impress
A skilled specialist, unconnected with the company,
who defends the interests of minority shareholders,
will attract investors and upvalue the company in their
eyes. However, to find a «right» person is sometimes
very hard.
an independent director
the board of directors should include
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