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| Home » IPO Planning, Structuring, Packaging and Management |
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IPO Planning, Structuring, Packaging and Management |
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Initial Public Offering (IPO) has become a much used name nowadays in the capital and securities markets across the world. Broadly speaking, an IPO is referred to as the first sale of stocks of a private company to the public. Resorting to IPO has become a popular phenomenon nowadays for the smaller and growing companies who wish to collect a huge capital from the market and use that to fuel their expansion in a big way. IPO or the public offering as it is widely called requires the involvement and assistance of underwriters and IPO advisors who deal with the IPO planning, structuring, packaging and management part of the issue.
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While going in for an IPO, an organization is expected to be prudent in selecting an appropriate IPO adviser. It is of critical import because the IPO planning, structuring, packaging and management rests quite significantly with the concerned advisor. Some of the leading names in the field of IPO planning and structuring are Lehman Brothers, HSBC Securities, Stanndard & Poor’s, Moodys, SBI Caps and a few others. The organizations are expected to provide them with a brief regarding the kind of future they envisage for them post the IPO. Based on that, the IPO advisors are to plan the issue accordingly.
Working on an IPO involves a host of activities, among which IPO planning, structuring, packaging and management is the most significant. The process takes a considerable period of time, usually a few months. Based on the inputs provided by the company, the IPO advisor is to plan the issue in such a way that it attracts the maximum public response. Further, the issue is to be so positioned depending upon the existing scenario of the capital market in the country, relevant government policies and overall economic scenario. The bottom line is that the public issue has to attract a considerable amount of interest among the investing community besides securing the investor confidence.
Planning an IPO also involves promotion of the issue in print and electronic media in such a way that it secures the attention and patronage of the investors. Structuring of the IPO relates to the distribution of the shares among the leading investors, say for instance, many of the big companies ensure that while the main promoters of the company retain sizeable holdings; a substantial part of the share is allotted to leading financial institutions like LIC, IDBI, UTI and others in India. How the entire shareholding is to be distributed and structured again is advised by the IPO advisors keeping in line with the vision and objectives of the company.
Packaging and management of an IPO are other important elements of an IPO strategy. How the IPO issue is packaged and presented in the local, national and global media and press meets, conferences and other relevant issues are handled, determines to a great extent the overall response an IPO is likely to garner. And finally, from the inception to the execution of the IPO, the whole affair needs to be so managed that the ultimate objective of an IPO is achieved. That the IPO attracts a good response from the investing public, major financial institutions opt for a good chink of the shares, reposing their faith in the company and its prospects and the whole issue is packaged and managed in the most professional manner.
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