IPO is like an open book exam

Equity capital markets (ECM)

Me: “IPO is like an open book exam. You can see from the prospectuses the kind of issues typically encountered by companies going for listing.”

My learned friend: “Yeah, but it is a 300 to 400+ pages of open book exam.”

While not every IPO is the same, the following are some common issues which should be addressed early to ensure the IPO is not delayed:

1. Conflict of interest between the listing group and its directors or substantial shareholders.

2. Whether the candidates for independent directors of the company undertaking the IPO and listing exercise are truly independent.

3. Expired or no valid licences in respect of activities carried out by the listing group.

4. Non-compliance of equity conditions or other major conditions imposed on licences, approvals, permits granted to the listing group.

5. Properties occupied by the listing group without valid certificates of completion and compliance/ certificates of fitness for occupation, approvals for renovation or modification or approvals for change of use.

6. Change of control provisions in agreements entered by companies within the listing group which require consent from the counterparties for the IPO.

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This post was first posted on Linkedin on 9 August 2022.

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