Is the IPO market about to open?

Many companies dreaming of going public are surely pondering this question right now. Unfortunately, however, none of us seems to have a crystal-clear answer to this question. Inflation trends, the timeline for central banks’ interest rate cuts, and developments in the global geopolitical situation will all influence when the window for going public finally opens.

So what should a company thinking of going public do right now?

Now is an excellent time to get the groundwork in order. Going public is always an intense and hectic project. The better a company has prepared and brought its processes and operating models up to “stock market standards” well in advance, the smoother the listing process will be. Summarising the company’s investment story, developing financial and sustainability reporting, and building brand awareness are examples of areas that should be addressed well in advance of a potential listing. The upside is that these efforts support the company on its growth path regardless of when the listing takes place, or if it happens at all.

What is the company’s equity story?

This is one of the most important, if not the most important, questions for a company thinking of going public. A good equity story explains why investors should invest in the company and answers questions such as:

• What does the company do?
• What kind of market does the company operate in?
• What is the company’s strategy?
• What are the company’s strategic objectives, and how does it plan to achieve them?
• What are the company’s competitive advantages?
• How is the company performing financially?
• How does the company create shareholder value?

A good equity story is always based on the company’s strategy and lays the foundation for everything else.

“Sustainability is at the heart of everything we do”

This is a phrase found in the sustainability reports of an increasing number of companies. Indeed, the importance of sustainability in a company’s business operations and in investors’ investment decisions is constantly growing. The EU’s Corporate Sustainability Reporting Directive (CSRD) significantly increases companies’ reporting obligations related to sustainability and makes sustainability an important part of, for example, the board of directors’ report. The CSRD will apply to an even broader range of companies, and its application is not limited solely to publicly traded companies. It is advisable to prepare for this well in advance.

A company can also begin preparing for the financial reporting required of public companies by publishing a quarterly or semi-annual “financial review” detailing the company’s financial performance. Preparing these reports is also an excellent way to refine the company’s internal processes as well as cooperation between communications and finance before the company actually becomes a publicly traded entity.

A company’s reputation isn’t built overnight              

This is a universal truth that, unfortunately, is sometimes forgotten. Building the reputation of a company and its management is a long-term endeavor that should be started well in advance of a potential IPO. Management interviews, visits from journalists, blog posts and opinion pieces, as well as regular press releases or social media posts on interesting topics, are effective ways to build recognition among both private and institutional investors.

In summary. While waiting for the IPO market to open, there are many things a company can do to ensure the listing process goes as smoothly as possible.

Get in touch if you’d like to hear how we can help you on your memorable journey toward going public.

Kare Laukkanen
050 553 9535
kare.laukkanen@irpartners.fi