IPO Stock Exchange. Primary public placement of shares (IPO). Where IPO is carried out

Each person engaged in both foreign exchange markets knows two or three stories about how ordinary people and private companies first entered the market and earned millions and billions. Sometimes it is the result of pure luck, sometimes a legitarious result of complex work.

Below will be considered one of these options, or rather what is an IPO, and what is the procedure for its implementation.

We will also touch on the question of how to make money on the company's exit to the IPO, while not being the initial owner of the company.

What is this concept like, IPO?

This is a reduction formed from the initial letters of Initial Public Offering, and translated as a "primary public offer." Such a term is established.

Under it is understood by the initial mass sale by the issuer of their securities, his "debut" on the stock exchange, after which he became a sign of financial and business circles. At the end of the IPO, the organization turns into a public company, and its shares become accessible to acquire an unlimited number of investors.

What does this useful give an IPO issuer?

Public sale of securities carries a lot of benefits:

Attracting less expensive than a loan or, capital that you do not need to return. For example, GM received $ 23 billion in 2010, Facebook two years later - $ 18.4 billion.
Improving the image at the expense of listing on well-known stock exchanges. In London, for example, VTB, MegaFon were placed. In New York - Twitter.
The appearance of fame, brand awareness, increasing customer flow. So, before the IPO in 2011 on NASDAQ, Yandex knew well only in our country.
The increase in the liquidity of shares due to open sale on the stock exchange.
Rider protection, since, with the impressive number of minority owners, it is difficult to collect a package of shares to obtain a decisive voice.
Strengthening the transparency of the issuer's activities and documentation and the growth of trust in Him by probable partners and creditors.
Attracting the well-known top managers through the availability of options.
Opportunity profitable sale Parts or total business at the peak of the value of shares.

What is the IPO in yourself? Is it safe?

The advantages that primary public accommodation possesses are accompanied by a number of difficulties and risks of the Issuer, namely:

Compliance with the considerable number of conditions and rules, one of which is the value of the company. The "threshold" of the exit to the well-known platforms is $ 50 million, an acceptable size for attracting serious partners-organizers - from $ 1 billion.
Duration: On average, IPO occurs within 1-3 years.
High costs: Services of underwriter, advertising and information support, registration of registration, etc.
The promulgation of detailed information about finance and production processes, which can be the property of competitors.
Reducing the quotations, which lowers the cost of the company and can threaten the increasing package of securities in unnecessary hands and partial loss Control by initial owners.
Problem behavior of minority shareholders and a number of other risks.

What is the exit to the IPO and the order of placement

This is the implementation of the required procedures, the algorithm for the preparation and conduct of primary placement. The issuer's company before going to the IPO belongs to a narrow circle of shareholders, after the exit - freely trading on the stock exchange. In this case, it will not be difficult to anyone. The output to the IPO passes in several stages.

1. Preliminary work.

Analysis of the results of work, production relations and cash streams, organization structures; elimination of shortcomings that prevent the foundation of the status of a public company (by reorganization, transition to generally accepted reporting standards, etc.).

2. Search for underwriter.

Usually, it is a large, international bank that will be engaged in organizational support IPO. In addition, the underwriter buys shares before their bidding, thereby ensuring the influx of capital issuer and its own earnings on the difference in the cost of papers.

3. Signing a contract with the underwriter.

At the same time, the initial stock price and capital size, which calculates to attract the owners is determined.

4. Due Diligence.

There are different concepts of this term: verification of due conscientiousness, due diligence, a study of reliability and others. In general, this process can be called a comprehensive assessment of the status and development of the company from the point of view of financiers, lawyers, auditors. The goal is to obtain genuine adequate data and the exclusion of all kinds of surprises.

5. Edition of the investment memorandum.

It contains detailed information on the upcoming issue, except for the updated stock price, the volume of their proposal and the estimated amount of attracted funds (they are indicated in the latest version of the Memorandum). This document is sometimes called the "bait", since it contains the necessary information to inform investors and preparing presentations.

6. Road Show.

This is an advertising campaign (exit presentation) about the planned event. It is designed for potential depositors and aims to sell them produced securities before trading. According to the results of the Road Show and the situation on the market there is a revision of the value of shares.

7. Selection of the Exchange.

It is known that the IPO is more efficient in world platforms, since the main capital is concentrated there. Recently, its holding in China is attractive. So, in 2016, the Hong Kong Exchange published leaders in the size of the primary proposals - $ 25.1 billion, in second place Shanghai - $ 17.4 billion for comparison: on New York - $ 14.4 billion, London - $ 7.8 billion . An important condition for choosing an exchange is the territory for which the issuer's products is calculated, and the price of the issue (abroad is more expensive). For example, " Child's world"I calculated the exit to the stock exchange in London and Hong Kong, but in the end it plans to be posted in February 2017 at the Moscow Platage, partly because the Funds of China and Saudi Arabia already have among its investors.

8. Registration on the stock exchange and in regulatory bodies. Assign the date of the IPO.

The right moment for placement may not appear immediately. The reason is negative trends in the economy or field of activity; plans for parallel exit, voiced by other players; Summer vacation period and other circumstances defining market quotes and investor behavior.

9. Approval of the emission prospectus.

This is the final version of the Memorandum. In addition, it includes data that was not in previous document variants.

After approval of the prospectus, the market sale of securities and balancing their value based on supply and demand begins. The results of the release are illuminated in the press.

How to make money on an IPO to an ordinary investor?

It is impossible to say that the process of participation in an IPO of an ordinary investor is a good earnings tactics. In recent history there are both positive and negative examples. Among the lucky issuers in the Russian market, you can note the magnet, Mosbirju and Alaros. And failures when leaving the IPO of TMK, Far Eastern Marine Shipping Company and VTB.

Usually about a preparing output on an IPO of a company is known for several months or even a year. The average investor is very difficult to assess the possibility of earning the company's exit to the IPO, as it is necessary to deeply analyze the company's activities, take into account the economic and political situation. For this, brokers or consulting agencies have services consisting in providing information about the company, which soon makes primary placement. The benefit for the investor may be that after going to the IPO, the initial price of the action can immediately change and quite significantly. If the primary price of shares is understated, then after going to the stock exchange, the price will grow and can be earned on this. Market demand And the offer on the stock exchange will look for the balance and the fair price will be installed.

But it can happen that the primary price will be overestimated and after public placement fall. Consider now an example of an American company. After entering the IPO, Facebook shares collapsed 2 times. It seemed that this was the most unsuccessful investment and from stocks need to get rid. But later, the shares began to grow and in a year they returned to the initial price, and two years later doubled. Today's Facebook Shares Owners who bought them on an IPO consider this purchase by one of their best investments.

As you see in the picture, at first Facebook shares were 38 dollars, then fell to 19, and then grew up without stopping until today.

Thus, the purchase of shares immediately after public placement carries both opportunities to earn and lose. If you approach this with the mind and carefully study the companies applying for an IPO, if you develop a strategy of sampling companies, then this will certainly give their fruits and you can become successful and rich.

At the exit of companies on the IPO, your trading system can be built. You no longer need to delve into technical indicators, like RSI, Bollinger Bands and pay attention to the divergence. Now you will need to concentrate on the company's financial indicators. Someone will seem easier for someone.

Conclusion

Now you know what the IPO is, for which it needs, what is the company's access to the IPO, what is the procedure for its passage and even how it can be earned.

In the end, I would like to note the fact that despite the complexity and risk of increasing capital due to lowering the cost of shares or not quite successful accommodation, there are many advantages that enhate the company to acquire the status of public. And for investors, such opportunities are sometimes the cause of superfits.

INITIAL PUBLIC OFFERING (IPO) - Made for the first time, a public offer to investors to become the company's shareholders is a complex complex of organizational, legal and financial procedures, in which many intermediaries are involved in addition to the company itself and potential investors. The objectives of the main IPO participants do not always coincide, each of them in the process of preparation and IPO faces its problems and solves its tasks, however, they are all interested in each other, are interested in the IPO to take place. Therefore, the entire complex of IPO problems should be considered from different points of view - the issuer, investors, intermediaries.

The relevance of the IPO problems for the issuer is mainly focused on the selection of the IPO scheme, the selection of the trading platform (country) on which the placement, the choice of underwriter, the set of measures to restructure the company, to disclose information about the company both during IPO and after him. The main objectives of the company in the IPO - attracting long-term financial resources in the maximum volume, the creation and maintenance of the status of a public company. An important point is to minimize the costs of preparation and conducting an IPO.

The main goal of a potential investor is to obtain maximum income in the future with minimal risk, diversification of the investment portfolio. Therefore, during the preparation and conduct of the IPO for the investor, the most important circle of problems related to the accurate assessment of the company's prospects, market risks associated with its activities and specific risks associated with conducting transactions with IPOs are both financial and legal ones.

The main mediator between the company and investors is underwriter. The main goal of the underwriter is to conduct a successful IPO, the results of which would be satisfied with both the issuer and investors who received new shares. The main tasks of the underwriter are the selection of the IPO scheme, the analysis of the issuer, the preparation and implementation of all legal procedures, information support, attracting investors, the organization of the work of other intermediaries to help in the preparation and IPO process. Key moment In the activities of the underwriter - determination of the price of the offer of the shares. Almost for any intermediary financial results The IPO is predetermined, so the main result for any mediator becomes a reputation of a reliable partner.

The possibility of the interaction of these basic groups of participants is largely determined by the regulatory and legislative base, the activities of regulators, the level of market infrastructure development. And on how successfully these groups of participants will interact, the development of the financial market in the country and the economy as a whole depends largely.

1. Decision on IPO

All this creates sustainable prerequisites for mass yield of large and even medium in size russian companies on the primary capital market. However, these prerequisites are necessary, but not a sufficient condition for making a decision on an IPO. Based on the world experience of primary accommodation, it is believed that the company should achieve the necessary dimensions, have good development prospects in its industry, show the positive dynamics of the main financial indicators, while the profitability of the activity is not necessarily. Do these conditions act in Russia? Are there specific Russian factors affecting the decision on IPO? For example, often such a factor call the desire to "whitewash" assets obtained during privatization.

How important is the sectoral affiliation of companies overlooking the IPO? After the collapse of the Hi-Tech sector, investors around the world are very wary of the proposals of the shares of information and biotechnological sectors. Russian Candidates for the IPO for the most part refer to the classic sectors of the economy, but the state announced the priority development of high-tech sectors of the economy. Maybe governmental support To help solve a particular company about an IPO, what should the state make in the framework of improving the regulatory and legislative framework so that the entry into the primary stock market has become commonplace for Russian companies?

If all the conditions for the decision on the IPO of a particular company are present, then who are owners or top managers - become the initiators of such a decision? Whether there is a decision on IPO on the Russian conditions "conflict of interests" between the owners of the company and managers who pay a lot of space in modern economic models of the company.

2. Election site for IPO

Russian trading platforms (MICEX, RTS)
Foreign trading platforms (LSE, NYSE, NASDAQ, DB)

The company who has decided on the IPO has the opportunity to post its shares either in Russia (on MICEX, RTS, SPVB stock exchanges), or abroad (most often it is LSE, NYSE, NASDAQ). What factors do the selection of the site for the IPO is determined? Who makes a decision regarding the choice of the Exchange and how great the role in this issue financial intermediariesaccompanying the IPO of this company?

It often expresses the opinion that some features russian legislation The securities market make an IPO on Russian stock exchanges such a legally difficult and long-term process, which is much easier and faster than posted abroad. This thesis actively use foreign bidding organizers, some of them even created special divisions on work in Russia and the CIS countries. However, if we take into account the cost of accommodation, the estimates show that when placing in Russia the costs of the company will be an order of magnitude lower than when placing abroad. For small companies, this may be a decisive factor.

Many Russian companies are quite reasonable to fear that russian market Due to lack of investors, it is not possible to accumulate large means to buy offered shares on a "fair" price, without a big premium for the size of the placement. The result of the IPO in this case will be too much dependent on the market situation and requires great art to guess a favorable moment for accommodation. How justified similar concerns? In addition, the weakness of the Russian market makes some companies fear the possibility of unfriendly "absorption" with an IPO in Russia. On the other hand, by entrying its shares to foreign shareholders, the Company assumes country risks - in case of loss of confidence in the country, foreign shareholders will get rid of the company's shares, which can dramatically reduce its capitalization.

Other factors affect the process of choosing the country of accommodation are called - long-term goals of the company's strategic development, sectoral affiliation, country (region) of the main activity, prestige issues, etc. In addition, any company is interested in the high liquidity of the secondary market of its shares, it is also important when choosing a site for an IPO. How important are these factors for Russian issuers?

A separate question - the interest of the organizers of the bidding and other professional participants securities market in attracting companies on an IPO. So far, in Russia, it was not possible to create an effective market infrastructure suitable for easy access to new young companies' capital, and the imperfection of the regulatory and legislative framework plays the latter role.

3. Formation of the placement team

Investment bank
Law Firm
Auditing firm
PR Agency
Consultant

The core of the placement team is the company itself - the current shareholders who decide on the IPO, as well as the top management that is responsible for the preparation of information about the company and directly interacting with the rest of the teams. However, the leading role in the team belongs to the Lid-Manager (underwriter), which is usually a major investment bank.

The underwriter prepares analytical materials, develops a plan and a scheme of an IPO, coordinates the work of all team members, interacts with regulatory authorities, forms a book of applications, guarantees accommodation, supports the market after IPO, etc. The right choice of underwriter largely determines the success of the IPO. What should and can be used as a selection criterion? Cost of services and project terms, the presence of an extensive base of investors, an experienced team with high analytical capabilities, reputation, financial resources for the implementation of the guarantees issued - what is more important? How important is the experience of the bank with this company? Are the requirements for underwriter differ in an IPO on the foreign market and in Russia?

The legal support of the project plays an important role in the preparation for IPO. What factors are most important when choosing a law firm - experience, reputation, international Practice? In whose interests, lawyers should act - in the interests of the Issuer or in the interests of potential investors? Is there a conflict of interest and how is it solved?

The role of the auditor is nominally reduced to confirm the reliability of the issuer's financial statements in the information memorandum and the emission prospectus, and for the IPO of the Russian company oriented in Western investors, reporting is necessary both by Russian standards and IFRS. Despite the nominal role of the auditor, the success of the IPO's success depends on the level of investors' confidence in the audit. Is there a high reputation of the audit company enough, or should other factors take into account when choosing an auditor?

Attraction financial consultant For IPO in Russia now is voluntary, although foreign exchanges require that a special adviser to be attended to be attended by the Exchange. How abolving the requirement for the obligatory presence of a consultant facilitated the supply of companies to the Russian market? What kind additional advantages Can you attract a financial adviser? What are the requirements of the company providing such services?

The information campaign (interaction with investors and the media, presentation and Road Show) can be carried out with the forces of the professional PR \u003d agencies and the help of PR, IR departments of the most potential issuer or underwriter accommodation. What are the pros and cons of these two options from the point of view of the final result? What factors should the company be guided when choosing a PR agency?

Each participant of the placement team may chase its local goals, the task is to subjugate all their actions of the main goal - to successfully conduct an IPO. The professional reputation of all participants in the placement depends on this. Nevertheless - is it possible to conflict interests? What can regulate authorities make to prevent this kind of conflict?

4. Training companies for public status

Due Diligence Issuer
Preparation and audit of financial statements
Legal expertise business
Assessment of technological and personnel potential
Marketing analysis of activities

The company's public status implies the formation of a comprehensive objective understanding of the company ( due Diligence.), This is a necessary condition for a successful IPO. The procedure for the formation of an objective presentation requires efforts primarily from the issuer itself. What aspects of the company's activities should be disclosed and in what amount so that we can talk about a sufficient publicity of the Issuer - the structure of the company, the structure of capital and assets, shareholders, the company's financial condition, market and specific risks of activity, corporate policy, development prospects?

First of all, the transparency of the company's legal framework is due to the necessary conditions of publicity. To attract potential investors, it is necessary to disclose and substantiate the need and interconnection of all the structures included in the company. It may be necessary to carry out its restructuring - to create a company with clear connections and consolidated reporting. For Russian companies that have received assets during privatization or in the course of mergers and acquisitions, it is possible to carry out additional thorough legal check for the possibility of occurrence litigation and tax claims. How important are these specific conditions for Russian companies related to recent stormy political and economic processes in the country? Is it important to investors the structure of the company, the ownership structure?

The indispensable condition for publicity is to draw up the company's consolidated financial statements on Russian and international standards And its audit. Obviously, the company will strive for satisfactory indicators of profitability, liquidity, the structure of assets and liabilities. Are these measures enough for successful IPO and what indicators are key? Do the potential investors on the other, non-financial indicators of the company appear attention?

IN last years Investors around the world more closely relate to the assets of the company offering their shares. The presence of effective production and modern technologies is often assessed higher than intangible assets and industry prospects. Much attention is paid to top management - sometimes companies overlooking the IPO are specially introduced into the executive management of managers who have already conducted successful IPOs.

It's believed that an important factor IPO is the availability of the company the prospects in the sector of the economy where it acts. Marketing analysis of activities conducted by the Company itself or attracted specialists may lead to the need to change the product series and making decisions on the conclusion on the market of new products or services, changes in the structure of suppliers and consumers, the creation of new divisions in the company's structure. What factors that define perspectives of the company are of paramount importance - the company's brand awareness, the company's share in the market, modern technologies Production, strong management team, clear development strategy, high quality operational management? How to evaluate these factors?

5. Improving corporate governance

Business assessment
Increase investment attractiveness and reorganization of the company
Optimization organizational structure Compliance with the best principles of corporate governance

During the preparation of the public proposal, the Lid-Manager organizes the company's business assessment to establish the initial range of the share offer price. For Russian companies, the assessment is hampered by the fact that the domestic market is developing, and this markedly complicates the preparation of reliable forecasts for income and risks. Therefore, to evaluate the company, along with the method of discounting cash flows, the comparison method with analogue companies operating both in Russia and abroad can be used. Which method is preferable? Are there any evaluation methods? What other features should be taken into account when evaluating Russian business?

The resulting assessment of the existing business may not satisfy the issuer, but its holding can identify bottlenecks and suggest possible ways to reorganize the company. The restructuring of the business and the conclusion from the company of non-core assets will quite possibly lead to the company's financial recovery and the achievement of the best indicators of economic activity: sales, costs per unit of production, profitability and profitability, liquidity, structure of assets and liabilities. Almost all of these indicators can be optimized by the relevant organizational measures. What these indicators are key in terms of the company's investment attractiveness? It is also extremely important that the company has a good credit history. The development of such history may require the restructuring of debts, conduct a number of bills or bond programs, which will additionally increase the "recognition" of the company by investors.

Business restructuring is usually accompanied by a change in the organizational structure of the company. Most often, asset management focuses in management companywhich becomes an investment core attracting investors in the market. Is such restructuring obligatory and which is the organizational form of the company overlooking the IPO?

From a public company overlooking the market, follows certain standards for business ethics in relation to shareholders - "best practices of corporate governance" (KU). These standards, the company takes voluntarily, they are determined not so much by law, how many features of the business culture of the country in which investments are involved.

Russian corporate governance legislation is limited to the requirements for the company for inclusion in the Cotted Sheets of the Stock Exchange (usually this is the next stage after IPO). On the other hand, the concept of "best practices of corporate governance" does not establish a comprehensive list of events. However, it is believed that the Declaration of the Company's management commitment to the principles of "Best Practice" ku, the effective functioning of the Board of Directors and its interaction with the company's executive bodies, compliance with the rights of shareholders, information transparency of the company - are required conditions To access the IPO. How important are these conditions in Russia? Are there any differences in the best practice ku in Russia and abroad? How significant are Russian and foreign investors consider these conditions?

6. Formation of the syndicate of underwriters

Underwriting

The functions of the organizer of the placement are so multifaceted that it often cannot cope with them alone. Therefore, functions are distributed among several investment banks that form a kind of syndicate with certain areas of responsibility. The main in the syndicate - a lid-placement manager - an investment bank who oversees the entire IPO process, attracts to expand the circle of investors of the coordinaries, whose task is to ensure the information of its customers - potential investors, collecting applications for shares, maintain interest in shares in the secondary market. In addition, a group of dealers can be formed for more efficient distribution of shares. What requirements are the lid-manager and the issuer to accommodation coordinators - experience in this market, the experience of the IPO, a wide client base, accustomed connections with other investment banks, analytical, legal and informational resources? Does the structure of the syndicate depend on the placement scheme, the sectoral affiliation of the Issuer, on the size of the company overlooking the IPO?

The formation of the syndicate of underwriters is accompanied by the signing of a number of contracts - underwriters and dealers. The key point is an agreement on underwriting, which the issuer concludes with the Leed Manager, and which defines a method for placing shares with an IPO.

A separate question is to determine the cost of underwriting services and the structure of cost distribution within the syndicate of underwriters. Remuneration underwriter can be fixed or depend on the capital attracted during IPO. What factors affect the size of remuneration during accommodation in Russia and abroad? How high the competition in this area of \u200b\u200bservices in Russia and abroad? Why are Russian issuers attract foreign investment banks as organizers, despite the higher cost of their services?

7. Legal support

Preparation (additional) issue of securities and securities prospectuse
Examination of transactions concluded with IPO

The company's output to the market is a legally adjustable process. It is necessary to perform a number of conditions and prepare a number of necessary documentsrequired by the authorities regulating the activities of the securities market, the Bid Organizer, and in some cases self-regulatory organizations. Preparation of documents - a complex legal process in which the company itself and a lid-manager is participating. Often, a specially invited law firm participates in the legal support of the IPO.

The most important stages of legal support for the final preparation process for IPO are the production of the placement scheme and the preparation of the emission prospectus. Russian legislation significantly complicates the primary placement process, so the lid-manager may offer issuer and investors such placement schemes that allow you to optimize procedures related to some uncomfortable legislative restrictions, for example, the preferential right of existing shareholders to receive shares in the framework of the new issue, price definition Shares, registration of the report. Obviously, such optimization should be carefully improved. With an IPO abroad, the role of legal advisers for Russian companies is even more important. For example, in the United States it is necessary to register the issue in accordance with the Securities Act of the State, where the company intends to conduct operations with its papers, and the difference in the nuances of legislation may be substantial.

Since Leed Managers often use complex initial accommodation schemes, the process of the transfer of ownership of new shareholders and funds from investors to the Company may consist of a plurality of stages, each of which should be legally pure. Therefore, the examination of transactions concluded with the IPO is an important condition for the successful preparation of the company to enter the market, a certain guarantee for investors and the issuer. Upon completion of the IPO, legal advisors both by the issuer and from the underwriter are preparing conclusions concretizing the procedure for the transfer of property rights, and an independent accountant makes it conclusion that all transactions are carried out correctly from a financial point of view. Are there any significant differences in these procedures in Russia and abroad and what regulatory acts Are these processes are regulated?

8. Informational accompaniment

Preparation of information memorandum
COMPETENT PUBLIC REPORT
Preparation of investment memorandum
PR accompaniment
Road Show.
Investor Relations.

The main task of investment banks involved in primary accommodation is to attract a wide range of investors. This can be done only by providing maximum information about the company so that investors can fully appreciate the expected income and investment risks. Information Support Potential investors have a number of features - the dissemination of information about important events of the potential issuer should be carried out in almost real time, there must be a wide territorial dissemination of information - both in Russia and in global financial centers, information activity should be very high, especially immediately before IPO.

The most important component of the information support for IPO is the preparation of the information memorandum, which presents comprehensive information about the company's business and the prospects of the company and the industry as a whole, the structure of the company, shareholders, management bodies, corporate policies, financial condition companies, risk factors, etc. Companies focusing on foreign investors include in the information memorandum information about Russian legislation in the field of securities market, tax legislation, information about the Russian stock market, etc. Although the range of issues disclosed in the document practically does not change from the company to the company, however, every underwriter comes to the compilation of the Memorandum Taking into account both the individual characteristics of the company and the circle of investors who will be offered shares.

The process of information support for the IPO itself begins with premarketing - searching the circle of potential investors, identifying investors' interest in the company's promotions. The results of premarketing should be as objective as possible and reliable, both the company itself and syndicate of underwriters are interested in this.

The next stage of information support is Road Show. This is the most bright stage that each company decides in its own way. The main difference of this stage from premarketing is the composition of the participants - the first persons of the company participate in Road Show. The success of Road Show determines the number of investors and applications submitted by them, and ultimately strongly affects the final placement price. Compilation of the Book of Applications Ends the Information Process of Preparations for the IPO, as a result of which the exact prices of the proposal of the shares appear in the investment memorandum.

At all stages of the process of preparation for IPO in the media, a certain positive information background is supported, the activity of which depends on the degree of publicity of the company and its recognition of its brand. The degree of information activity in the United States is regulated in order for investors to be excessive pressure, and the company rigidly adheres to the SEC rules even if the placement is not occurring in the United States. However, in 2006 In this area, serious changes will come into force, which may affect the content and activity of information support.

It is impossible to assume that with the end of the IPO and the successful placement of shares, the company information activity can be minimized. The publicity of the company imposes certain obligations on it to disclose information. However, more importantly, the company's capitalization is now highly dependent on the confidence of investors, which must be constantly conquered again and again. Therefore, usually companies create special services (IR-departments) so that the interaction with investors is as efficient as possible. How should the company work with investors, what should be the criterion for the successful work of the company's IR services?

9. Features of the placement of securities when IPO

Strictly speaking, almost all accommodations that Russian companies conducted are not an IPO in the full sense of the word. Due to the complexity of Russian legislation in Russia, the implementation of already existing shares is understood as an IPO, often combined with the emission of a new issue to fill the share of "old" shareholders in the authorized capital. Such an IPO scheme is more complex and contains certain risks and tax restrictions. Is there currently in the Russian conditions "optimal" placement scheme? Do the accommodation schemes change after the adoption of a number of amendments that simplify the procedure for holding an IPO?

The principles of placement of securities with an IPO are negotiated during the selection of underwriter and the conclusions of underwriter agreements. There are two basic principles of placement - when the underwriter takes on solid obligations at the price and guarantees the entire amount of placement, the second - when the placement is carried out on the principle of "maximum efforts". Each of the options has its pros and cons for the issuer. How much can affect the placement of the presence of certain reservations in the underwriter agreement, for example, a "all or nothing" reservation?

When accommodating, it is important to develop a transaction technique in advance, taking into account the infrastructure available: a way to deposit funds and securities, a way to conduct an auction, the possibility of accommodating on several trading platforms, the possibility of combining stock and non-systemic placement, etc .. in this process not only participate Issuer and underwriters, but also representatives from the organizer of the bidding and other professional participants of the market (the settlement and touch chamber, the depositary, the registrar).

Often in Western markets, when placing new shares, special mechanisms of stabilization of shares are used in the initial period of secondary bidding, and the conditions for the application of these mechanisms are negotiated in the Agreement on underwriting and are declared investors in advance. The most widely used mechanism - Green Shoe is a peculiar option that gives the right underwriter to buy an additional number of shares in the event of high demand from investors. Are such mechanisms apply during accommodation in Russia and how far they are beneficial for the issuer?

10. Analysis of completed IPO transactions

After the completion of the IPO, with the output of shares to the secondary market, it is possible to evaluate how successful it turned out. First, for the issuer, the obvious sign of success is that interest that the shares caused among investors - the amount of demand, recorded in the book underwriter, and exceeding the final price over the estimates that were given in the Memorandum (Prospekt).

However, many believe that the criterion of successful placement is the emergence of the liquid stock market and a sharp increase in stock price in secondary trading. Obviously, in this issue, the goal of the issuer and investors are directly opposed - investors, and both underwriter are interested in a high premium for primary placement, the issuer is interested in the opposite. It should be noted that the effect of "undertaking the placement price" is characteristic of all markets, and the IPO of Russian companies is no exception. On the other hand, it can be argued that a sharp decline in the share of shares of the company is unambiguously regarded as a negative feature, since even the actions of the underwriter could not prevent the fall in prices.

In addition, there are other factors for which attention should be paid - for example, the structure and composition of investors. According to some estimates, the number of investors usually receiving shares in a typical IPO does not exceed thousands of people. If the shares acquired speculators investors, the secondary market will be liquid, but prices may be very volatile. If the shares acquired funds, then, given the duration of their investment horizons, it will negatively affect liquidity, but stabilizes the price. The issuer's company must decide on the range of potential investors at the stage of choosing a lid-manager, and if the circle of investors who acquired shares turned out to be not relevant to the expectations of the issuer and underwriter, it is unlikely that such accommodation can be called successful.

A group of analysts under the direction of A.V. Demchenko - general Director Institute of Stock Market and Management

Leadership and management

INITIAL PUBLIC OFFERING (CROP. IPO, primary public offer / placement). Distribution of the package of shares among external investors before their free circulation on the stock exchange. The placement of subsequent releases will already be called public placement or PO (Public Offering).

Today, the successful conduct of the procedure for the initial placement of shares on stock Exchange (IPO) allows you to bring the company to new level development. On the Russian stock market, the term IPO is sometimes also used on the stock exchange of major shareholders on the stock exchange.

Advantages of IPO.

The process of converting a company from closed to public forms the following main goals of the IPO:

Increase financing. The publicity of activity and its transparency for investors allows to obtain external financing in the amount of significantly exceeding the capabilities of the owners.
Free definition of stock price. Allows you to more adequately assess the current capitalization of the firm for possible mergers or acquisitions.
Free turn. The possibility of free implementation increases the cost of securities;
Significant liquidity increase. The possibilities of private, state and bank lending are expanding, customer loyalty increases and other non-financial benefits;

As a result, the interests of all participating in the IPO should be as follows.

Options for organizing an IPO.

In financial practice, the following three options for organizing the primary proposal are most common:

Fix price. The second name "Open Offer" - In this embodiment, the value of the shares is known in advance. Applications are accepted until the entire issue will be fully accomplished.
Definition of price through auction. Basically used when selling treasury bonds and privatization. For the IPO of private companies, it is rarely used, since there is always a risk of "taxation". The auctions are most effective for incorporating large companies that are widely available and can be obtained by all participants.
Book of applications. This option allows the underwriter to fully control the IPO procedure - it looks like this:
The initial price corridor is set (Price Range), within which there is an acceptance of purchase applications. The range is removed depending on interest, that is, the final purchase price may be higher or below the initial one.
In the application, in addition to the number of acquired shares, the maximum price is indicated (limit), which the buyer agrees. Additionally, applications are divided into three types:
normal (Strike Bid) - Purchase is made by final price;

maximum allowable price (Limit BID) - purchase, only if the final price does not exceed the specified level;

step Bid) - the number of purchased shares varies depending on the growth or fall of the price;

For each individual output, a separate method or combined schemes can be used: for example, the option "Open offer (first tranche) + auction (all subsequent)" or "Book of applications (first tranche) + Open offer (second tranche)".

Mandatory Stages IPO.

In this section, we briefly describe the main stages of the IPO process. This is a mandatory sequence, but specific deadlines and details will certainly be different for each company:

The decision is made to start the IPO

The fulfillment of mandatory requirements and procedures for regulators to the process is quite complex and long, and, as practice shows, takes at least 1-2 years from the moment of adoption initial solution.

Conducting a general meeting and creating an IPO coordinating management authority

At the second stage, it is necessary to decide on the investment bank, as well as companies for conducting legal and financial audit. The bank, in addition to counseling and finding potential investors, also assumes the functions of underwriting - guaranteeing the issuer to obtain a preliminary aggravated minimum revenue from the placement ("solid obligation", Firm Commitment) or selling the maximum possible number of shares ("maximum effort"). Functions of underwriting can be performed simultaneously by several companies or banks.

Creation of emission prospekt

The preliminary option is provided to the Securities Commission and in addition to the financial statements confirmed by an independent audit, and should include all the necessary information for making a decision: in which markets the company works, major competitors, activity strategy for the next few years and other data.

In creating avenue, under the participation of underworkers, which will then use the information received for the IPO presentation for potential investors.

"Road Show" or "Road Show"

Slangovation designation of activities for the conviction of customers to acquire shares of the future issue. It happens in the form of negotiations on the sale of large packages, various meetings, advertising, publications in the media, presentations and other marketing events.

From how effectively this stage has passed, the ultimately depends on a common success. It is here that the initial content of the book of applications begins and the final quantity and the initial price of papers are consistent. The result of all improvements will be the final version of the emission prospectus and, if necessary, the price correction (RRICE AMENDMENT).

Transfer of shares to start trading

Not later than two days after the final version of the IPO prospectus is considered to be held, and the shares come to the management of undercurrent. Free conclusion of transactions on the stock exchange begins the day after the end of the last distribution.

The end of the initial placement process

After transferring shares, underwriter and in the case of a "solid obligation", it translates the company to a pre-agreed amount, after which the transaction is considered completed. Seven days after the start of trafficking, the placement is officially confirmed as those held, and after another 25 days the "period of silence" is completed, during which the underwriters are prohibited by the publication of any forecasts and assessment of the company's value.

Accommodation on US and Europe Stock Markets

The US stock market is the largest and most liquid in the world, with a huge investment base that allows the initial placement of shares of almost any volume. For companies, non-residents access to the stock exchange is carried out with the help of American depositary receipts (ADR) - securities giving the right to own foreign securities, but with the appeal only within the United States.

Legal regulation of the IPO procedure in the Russian Federation

Regulation of the procedure for conducting the initial placement of shares is managed by the FSFR ( federal Service in financial markets). Basic regulatory documents are the laws "On the securities market", "On joint Stock Company"And" On the protection of the rights and legitimate interests of investors in the securities market. " Most of the initial securities are drawn to the Joint RTS-MICEX Stock Exchange. The diagram shows the primary placement procedure, which was used on the MICEX and is now used on the combined "Moscow Exchange".

What is an IPO? In stock news, slipping information that a certain company conducted an IPO. In itself, this word is an abbreviation and decrypt as an initial public offering (usually pronounced as an IPIO), which means primary public accommodation. If we talk simple words - IPO This accommodation on the stock market of the company's securities to attract funds (usually under this term, especially in Russia is meant to sell shares). As a result, it becomes available to buy all institutional and private investors, including foreign ones. Everyone can buy a certain proportion of the company.

What is the benefit for companies

Almost all companies sooner or later face the problem of lack of funds for further development. To get them there are several ways:

Attracting loans in banks. The way is quite expensive, given the high interest rates. In addition, there are risks of non-treatment or obtaining not the most necessary amount.
Release your own bonds. This is cheaper fundraising, compared with loans. But still, it has a strong debt burden on the work of the enterprise. Payments on coupons for a long time significantly reduce its profits. Yes, and the principal debt (nominal bonds) will need to pay off after the expiration.
Attracting large investors. The most optimal, but also the most difficult way. The company may simply and not find those who want to invest in business development.
IPO in the stock market. Before accommodation, the company must pass a number of assessment procedures. The procedure itself is complex and requires significant temporary and financial costs. Only established companies with good indicators and the prospect of development can be allowed to IPO.

Going to the market with the initial public offer, the company usually pursues several purposes. The main thing of course is to attract funds for business development. A new influx of money allows the company to enter a higher current of its development and strengthen its position in the market. Money received from the sale of shares on the stock exchange goes to finance long-term projects and do not require their return in the future, as in the event of a loan or issue of bonds.

The second reason is the increase in the capitalization and liquidity of its assets. As a rule, before the IPO, the company's cost is significantly lower. Public accommodation increases the company's authority in the market, its brand becomes more recognizable. This makes it much easier to keep business and enter out profitable contracts. As a rule, banks more willingly give loans to develop such companies and at more reduced rates (the so-called risk premium).

Do I buy a private stock investor with an IPO?

During the company's release to the market, it does not officially have any history of its development. All financial indicators are hidden from a wide range of investors. And only after entering the stock exchange, the company is obliged to provide all reports on further financial activities. This is one of the main deficiencies for investors. Therefore, buying with an IPO is more like a lottery. For several days, stock quotes are subject to. Their cost directly depend on the prospect of the company's development in the future in the eyes of investors. And the stronger these expectations, the more high demand we will observe. All this is capable of push prices far up. But as it usually happens, most investors are inclined to be wrong in their forecasts. Therefore, in the first days, a strong "swing" can be observed when prices are changing several percent during several days (or even dozens percent) both in the large and less cost.

Already on the first day, Alibaba quotes accommodated by 38.1%. For several weeks, the growth continued, but then the quotes fell even below the initial almost 40%. And only recently, the price of alibaba shares exceeded the original, but also reached the peak values \u200b\u200bof the accommodation on the stock exchange shown in the first days.

During the year after entering the market, the capitalization of Alibaba decreased by almost 60%.

Alibaba Capitalization Fall within a year after IPO

And only after almost 2 years the price level approached, and then surpassed the quotes during primary placement.

Schedule Alibaba since IPO

Therefore, for long-term investors, it is better to wait for the time until the excitement takes place a little and the price will be established for quotations.

For speculators or short-term traders, this is the opposite, it is an advantage and an excellent chance to earn, in view of how it was described above, sharp changes in quotations, when a high growth today can change with a sharp decline tomorrow. It is on these strong oscillations that can be removed with good profits.

The most profitable successful IPO

According to statistics, the cost of most companies after entering the market in the long run only increases. For example, Sberbank quotes rose more than 1000 times, Google 100 times, Norilsk Nickel - 10 times. In the primary public placement, gigantic amounts of money are rotated, which are measured by billions of dollars.

There are even several funds in the stock market specializing only on buying companies during IPO, such as First Trust IPOX-100. For profitability, it exceeds the indices of S & P 500 and NASDAQ. Since 2010, its value has grown 4 times !!!

Consider the several largest IPOs that collected multi-billion amounts in the last 10 years.

Industrial and Commercial Bank of China - 22 billion in 2006
Visa - 17 billion in 2008
GENERAL MOTORS - 18 billion in 2010
AGRICULTURAL BANK OF CHINA - 22 billion dollars (2010)
AIA GROUP - 22 billion in 2010
Facebook - 16 billion in 2012
Alibaba Group - $ 25 billion in 2014

Examples of unsuccessful IPO.

A vivid example of not quite good placement on the stock exchange is Facebook shares. In 2012, this was the most anticipated IPO of the year. But at the initial price of $ 48, with the opening of the market, the rapid colts of quotations were occurred up to $ 38. The stop was short and in the future the price fell by another 25%. As a result, the overall fall was about 60%. True, now after several years, the value of the shares rose almost 3 times.

The second example is already from the history of the Russian IPO. In 2007, the so-called People's IPO Bank VTB was held. The value of the action during primary placement was 13.6 kopecks. As a result, it was possible to attract 1.6 billion investments. But ...... the price above the placement price lasted for less than six months and then the fall of quotations began. Since 2007, the price has not even approached the initial 13.6 kopecks per share. In the last 2 years, they traded within 6-7 kopecks per share. And this is after almost a decade, when prices for everything, even taking into account inflation, increased several times.

Schedule for VTB shares from the moment IPO in 2007

The success that is waiting for the company when changing the status from private to public, no longer needed evidence - to represent the company's shares on the largest stock exchanges in the world not only prestigious, but also profitable.

but conduct an IPO. Not so simple - the process is long and time-consuming.

What is an IPO. - definition and essence of the process

Initial Public Offering (IPO.) - Offer with the organization owned by the public shares. Thus, a shareholder of the Company can be anyone. The company's output on the IPO leads to the fact that the requirements for it on the part of regulatory instances are fundamentally changed. Procedure IPO. It begins with primary accommodation. This procedure lasts from several months to a year.

The main goal of the IPO is

- Attracting third-party funds that can be effectively used as an investment or for business development. Shares, in turn, will cover part of the expenses at the conclusion of transactions. Moreover, exit on IPO. It makes it possible to get highly qualified specialists in the company. And finally, the company gets the opportunity to get into the list of the world's largest stock exchanges, which significantly receives its prestige.

Roughly speaking, Ai-Pi-o allows you to sell the company's shares on the stock exchange, where to buy them can anyone. At the very beginning, the so-called primary market passes when the company's shares are sold directly directly, that is, the company itself speaks. At the time of the IPO, the stock is divergent as hot cakes, and when they ends, investors themselves will appear sellers, this is called the secondary market.

At the first stage, the company receives a profit from the sale of shares, often amounts are calculated hundreds, millions and billion dollars. Further, the company can redeem its own shares from the secondary market, wait until the course of papers rise and sell them again. The IPO is the first public placement, the procedure of which requires a company of certain actions, for example, now the company must publish financial reports, quarterly reports And other data, have a relationship with investors and so on.

Watch an advanced video about what an IPO is and what is its essence:

Examples of IPO.

In 2007, the "folk" IPO was held russian bank VTB. It was one of the largest events for banking system In Russia, on that day, the Bank's capital increased by $ 8 billion. Initially, the shares were offered at a price of 13.6 kopecks. But in just a year, the campaign fell up to three kopecks, and still traded in price twice below the originally proposed.

What happened to shareholders you can read in more detail in the article about.

The well-known Facebook company in May 2012 conducted an IPO at a price per share of $ 38. The company earned this 16 billion dollars, but by August the price for their shares fell twice. True from now on, they began to grow steadily:

IPO output in Russia

IPO in Russia has its own characteristics. As practice shows, our companies do not show special activity in the domestic market, preferring operations abroad. Be that as it may, recently IPO of Russian companiesit began to pass on the Moscow Stock Exchange, which can be called a positive trend.

According to S. Egyssant, which occupies the post of chief economist ITINVEST, the reason for this is clear - the main capital is still abroad.

The IPO market, for example, is very developed in China due to the good state of the local financial market.

At the same time, the placement of the IPO on Russian sites is quite rare phenomenon. The IPO rules in our country are quite serious, while the market is not developed enough, and the essential part owned by major businessmen of assets, in turn, is stored in foreign banks. All this leads to the fact that the organization of the IPO in Russia does not cause any enthusiasm companies.

Currently in Russia is about two hundred closed companies from money turnover Approximately 500 million dollars each. All of them are able to go to the IPO.

Experts argue that the number of bonds posted over the past few years has increased by about half. At the same time, about 40% of the issue of shares on the stock exchange of domestic companies were conducted on Russian sites.

Recently, Russian enterprises have become interested in stock exchanges in our country. Experts believe that the domestic IPO has a positive development dynamics and major resources for growth. But in the long run, the interest and interest of accommodation at the sites of other countries are expected.

What is a folk IPO

It is worth clarifying that such a folk IPO is somewhat different from the classic one. Securities This placement is calculated on the scale of the country and are necessary for the population, where the issuer works. Popular IPO works for privatization, which is necessary to strengthen the budget. In Russia, such an IPO is more often held by state companies.

One example is the sale of government assets of England, in the 80-90 years only citizens of England could buy shares of several major national companies - British Gas, Rolls Royce, British Steel and a few more.

Public attraction of funds is a contribution to the future of any enterprise. To carry out a successful deal, it is necessary to clearly define and bring to the market participants, tasks and strategy of the company. Sometimes enterprises are trying because of all their might to achieve rapid results, proven themselves in the market. But only the correct management of investors' desires can allow enterprises to implement long-term programs.

Organization of IPO.

Primary placement - IPO begins with the hiring of an investment bank ( underwriter). Despite the fact that in theory theory can sell shares on their own practical incarnation this feature Not received. The agreement between the bank and the firm provides for such key aspects of the transaction as the type of shares, as well as the amount of attracted funds.

After his conclusion, the underwriter must submit an investment memorandum into the regulatory instance. Russian IPO. Controlled by the Bank of Russia. The Memorandum contains information about the management and shareholders of the company, which decided to go to the IPO, financial statements, information on current issues of the company, the goals of attracting funds. After checking the data assign a date of the IPO.

The benefit of investment banks

Underwriters make profits on the difference between the value of the shares until the IPO and the bidded set to the beginning. The opportunity to earn money on collaboration with a promising company creates serious competition between potential underworkers.

Usually, they hold a presentation of the company that declined to conduct an IPO to attract the most promising investors. At the same time, the latters are able to become the holders of the shares before the announcement of the auction ( this process is called allocation.).

The cost of shares is determined by the organization overlooking the exchange and the investment bank shortly before the date of the IPO. The price depends on various factors - starting with the situation on financial market Before the prospects of the company itself. At this time, serious competition arises between the exchanges fighting for the right to place major companies in their listing.

After the IPO, the promotion becomes available to private investors only after the official start of the trading, that is, to open the work of the exchange in the morning. However, it is not worth gaining them in the first days - it will be wiser to wait for the price stabilization, although often stocks after an IPO have a tendency to grow to 300%, but after sharp growth may fall to initial cost. Such unpredictability and adds risks.

Stages of IPO.

Adjustment of the company. The preparation for the IPO should begin as early as possible. From the moment of the placement of the placement before the start of the trading, approximately four years should pass. Before the start of direct placement, the transparency of the company's legal framework is required, improve the quality of management, to obtain a positive reputation as a borrower, increase brand fame in the market.
Exit company to the market.A year before the planned date of the company, it is necessary to decide with the underwriter. In this case, a tender is held, sometimes a bank having an issue by the Embassian general projects with the enterprise. Together with the underwriter are considered possible options stock locations, intended placement prices, size package size. Preparations for market entry takes about four to six months, after which IPO is carried out.
Waiting for a suitable moment.The main factors affecting accommodation include the readiness of the company to implement the project and the state of the market. For example, you should not rush if for one week the initial placement of a large number of other companies is expected. Each exchange has adverse periods: Christmas in America and Europe, summer vacation period. It must be remembered that even in this case market conditions They may change under the influence of any factors, so the mystery of the success of the IPO will be stored until the end of its conduct.
Period of working with investors.Financial specialists argue: IPO is just beginning after the initial placement of shares. Large attention is required to support the company's website, publishing reporting, work with investors. Along the way, the fight against deceivers should be made and be ready for the general decline in the market.

Specialists in the field of finance prophesy to the Russian IPO is a good future. Why then domestic companies give the advantage to conduct an IPO on foreign exchanges? The answer lies on the surface: all capital - in the West, which is why there are shares of the corporation from around the world.

IPO becomes more and more popular in the People's Republic of China - the local capital market has grown, and attract Chinese cash Many wish. Investors are in no hurry to be placed on Russian sites due to the protection of property rights and too much market capacity. A significant part of the free assets in the possession of businessmen and politicians,it is not posted on the account of state banks, but in foreign offshores and funds. Under these conditions, it is possible to understand the behavior of Russian companies seeking space abroad. In addition, for many russian enterprises from foreign capital Participation in IPO is a priority requirement of shareholders seeking to increase profits and minimize possible risks.

Video: Goal output procedure

Pros and Cons IPO

The decision to conduct an IPO suggests that the company is consistently developing and ready for the transition to a new level. Becoming public, the firm can count on the inflow of qualified employees and the growth of business reputation.

The placement of shares on the stock exchange is one of the main apparatus of financing and improving the enterprise. Attracting new material benefits during IPO allows the enterprise to get the missing money to expand. The system allows you to find the most favorable sources of capital and reduces the cost of attracted subsidies. IPO allows you to open new opportunities in the business world, helps to optimize the capital structure and get additional access to stock market, Including overseas.

However, IPO has and cons.

First, the IPO requirements for such a company are tightened, and control over them, including financial, strengthens. The minus system is reinforced after the "exit to the light" by the regulatory authorities. There is a huge number of rules nominated by the state and stock exchanges, which any company must adhere to.

Secondly, Calculate on the ambulance profit can except the largest IPO are the most famous and fast-growing companies.

Another disadvantage - It is not always an enterprise able to sell its shares and make money after IPO due to lowering their course and business capitalization. Due to the lack of exchange history of the Issuer, the investor cannot predict how the promotions of the enterprise in the future will behave, and therefore participation in the IPO, almost, in all cases risky.

And finally, the cost of the IPO is quite high.

Summing up, it can be said that the IPO is the procedure in demand and in modern conditions necessary. Any company may decide on this step, however, the benefit in the case of the company's transition to the status of a public company is obvious. It is obvious that in Russia IPO will be widespread - only legal support for medium and large businesses is needed.

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