IPO Considerations for Large Business Groups

Over the past 3 years, we've had the privilege of being part of the accelerated bookbuilds of ADNOC Drilling shares on the Abu Dhabi Securities Exchange, share swap of AIQ with Abu Dhabi Securities Exchange-listed Presight, and listing Swvl on Nasdaq. We reflect on the learnings with Yasmine Nazmy at Inc. Arabia. An IPO is not just a means of raising capital; it is a gateway to accelerated growth, market credibility, and access to a broader pool of investors. The first step is often an IPO readiness assessment. This exercise identifies gaps in the company’s financial systems, governance framework, and operational processes. Timing is critical. Market conditions, sector trends, and investor sentiment can significantly impact IPO success. IPO readiness also requires a clear understanding of regulatory obligations. Depending on the chosen market, companies may need to comply with rules governing corporate disclosures, insider trading, and environmental, social, and governance (ESG) reporting. Public companies must have a board of directors that includes independent members with the expertise required to guide the company through its next phase of growth. Financial readiness is another cornerstone. Public companies must produce accurate, timely financial reports, often within 30 to 45 days of quarter-end. Internal controls must be strengthened to address gaps, particularly in high-risk areas such as revenue recognition, receivables, and information technology (IT) systems. An IPO is as much about storytelling as it is about financial performance. A compelling equity story is crucial to attracting investors. For companies in emerging markets, such as the MENA, this narrative must balance local and global investor expectations. MENA investors often prioritize dividend yields, even for high-growth companies. ESG considerations are also becoming central to the equity story. Investors increasingly expect companies to demonstrate not only financial returns, but also positive societal impact. Effective storytelling also requires consistency. Companies must ensure that all communication channels – from investor presentations to press releases – align with the broader narrative. The costs of going public can be significant. Companies should engage experienced advisors early to budget accurately and optimize resources. Operational demands can also strain internal teams. Expanding the finance, legal, and compliance functions is often necessary to handle the increased workload. Investor relations is another area that requires significant investment. Proactive engagement with investors through roadshows and earnings calls is critical to building confidence and maintaining transparency. Operational excellence remains a priority. Companies must continue to innovate and grow while ensuring compliance with public market standards. https://lnkd.in/d9_CGN8v

As a data privacy and AI lawyer, SEBI’s approval for IPOs from six companies, including HDB Financial Services and Vikram Solar, signals a dynamic phase for India’s capital markets. These IPOs, with HDB aiming to raise ₹12,500 crore, highlight critical data privacy and AI considerations for businesses going public. Key implications: Data Transparency in IPOs: Companies must ensure transparent handling of investor and customer data during IPO disclosures, aligning with India’s DPDP Act to build trust and meet SEBI’s stringent requirements. AI in Financial Modeling: Firms like HDB Financial Services, leveraging AI for credit risk or valuation models, must ensure algorithms are unbiased and auditable to comply with SEBI’s governance standards. Stakeholder Data Protection: With public offerings, companies like Vikram Solar must secure sensitive operational data shared in prospectuses, implementing robust cybersecurity to prevent breaches. Regulatory Compliance Automation: AI-driven tools can streamline SEBI compliance for IPO processes, but firms need clear data governance frameworks to maintain accurate records and avoid regulatory penalties. As companies tap public markets, prioritizing ethical AI use and data privacy is crucial to ensure compliance and investor confidence. ANB Legal #DataPrivacy #AI #Fintech

Rushing into an IPO without proper preparation can lead to disappointing outcomes like low valuations, poor stock performance, or even withdrawal. On the other hand, waiting too long risks missing market opportunities or allowing competitors to take the lead. So, 𝐡𝐨𝐰 𝐝𝐨 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐬𝐭𝐫𝐢𝐤𝐞 𝐭𝐡𝐢𝐬 𝐝𝐞𝐥𝐢𝐜𝐚𝐭𝐞 𝐛𝐚𝐥𝐚𝐧𝐜𝐞? It starts with a comprehensive evaluation of both internal readiness and external timing dynamics. From my experience, here’s what companies need to get right: 𝟏. 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐥 𝐑𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬 𝐢𝐬 𝐍𝐨𝐧-𝐍𝐞𝐠𝐨𝐭𝐢𝐚𝐛𝐥𝐞 An IPO isn’t just a milestone; it’s a transformation. → 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐑𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬 Start preparing at least 24 months in advance. This includes hitting revenue targets, building robust internal controls, addressing structural challenges, and strengthening management. → 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞:  Investors want confidence in your trajectory. Show consistent results, sustainable growth metrics, and a clear plan for deploying the capital you’ll raise. 𝟐. 𝐋𝐨𝐨𝐤 𝐁𝐞𝐲𝐨𝐧𝐝 𝐌𝐚𝐫𝐤𝐞𝐭 𝐂𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬 Markets fluctuate, but your timing should account for sector-specific dynamics. → 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐆𝐫𝐨𝐰𝐭𝐡 𝐂𝐲𝐜𝐥𝐞𝐬: Are you in an upswing or navigating a dip? → 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐯𝐞 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞: Is your offering unique or getting lost in a crowded space? → 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐅𝐚𝐜𝐭𝐨𝐫𝐬: Are there any sector-specific hurdles you need to clear? 𝟑. 𝐀𝐬𝐬𝐞𝐬𝐬 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐒𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 IPO success is as much about the mood of the market as it is about your business. → Gauge demand-supply dynamics for similar offerings. → Tap into sector-specific investor appetite—some industries shine even in sluggish markets. → Account for information asymmetry—investors need to fully understand your story. 𝟒. 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐬 𝐭𝐡𝐞 𝐁𝐚𝐜𝐤𝐛𝐨𝐧𝐞 A rushed IPO is a risky IPO. Take the time to: → Benchmark against peers in your industry. → Set realistic revenue and growth targets—overpromising can backfire. → Put corporate governance systems in place; this builds trust and credibility. IPO timing is as much art as science. It’s about making sure your company is ready to shine under the public spotlight while leveraging market opportunities. What do you think is the most critical factor in timing an IPO? #IPO #capitalmarket #IPOready #goverernance #regulatory

The IPO window has opened, but only selectively. Together with Rahul Baig at Wells Fargo, we hosted a discussion this week on the IPO window following the SpaceX IPO. Our discussion brought together the sell-side, exchange, and buy-side perspectives, with Jesse Chasse from Wells Fargo, Crystal Shen form NYSE, and Atish Nigam from Blackstone offering their perspectives. Many thanks as well to the guests who joined us for their excellent questions and an engaging discussion! Four observations about the IPO window today that stood out were: 1. We are in a narrative-driven market. The market is giving credibility to the narrative of category leaders such as SpaceX or Anthropic. Much like Uber and Lyft in the ride-sharing era, these companies are defining an entirely new market. Investors aren’t simply buying revenue, they’re buying the potential to shape an industry for the next decade. 2. The metrics that IPO buyers are looking for are therefore sector-specific. Where the general threshold to go public might be around $300M+ today, that bar raises or lowers depending on whether your sector is more favored (AI infrastructure and semiconductor companies) or less favored (traditional SaaS companies).    3. The “internal IPO window” matters as much as the external window. It's difficult to time the markets, but companies can focus on their readiness by building a financially predictable business. Focus on when you can reliably meet and beet your plans over the next 4~8 quarters. Only then – when you have built a reliable economic machine – are companies ready for the public markets. 4. The scale of the AI revolution is such that we could be in for 3~5 years of continued market enthusiasm for AI-era companies. One observation underlying this long-term enthusiasm: companies such as NVIDIA have strong financial performance, relatively light leverage, and valuation multiples that feel far more reasonable than we saw in prior market bubbles. This is quantitatively different than earlier tech bubbles that we have experienced, and the implication is that we could still have a long way to go here. When considering where we are in this tech cycle, one could also argue that we have already seen a different kind of bubble pop: the decline of valuation multiples for traditional SaaS businesses reflects a popping of investor expectations when it comes to revenue predictability for SaaS era incumbents that are now at risk. My biggest takeaway was that - as the saying goes - the future is already here, it’s just unevenly distributed. The market’s read of the future is what is determining not only the types of companies that can go public but also the metrics they need to achieve to do so.

Don’t go Public, go Strategic! That was the clear takeaway from our CFO roundtable yesterday. There’s a lot of noise in the market right now, AI driving private capital, more companies eyeing the public markets for liquidity. But when you get experienced CFOs in a room, the view is far more pragmatic. Here’s what stood out: 1. Strategic exits are often the smarter move IPOs aren’t always the golden ticket. They’re expensive, time-consuming, and distracting. In many cases, a strategic exit delivers: ✅Better multiples ✅A cleaner process ✅Less risk Don’t build your entire plan around going public. 2. Timing isn’t on your side (right now) Even strong companies could struggle in this window: ✅Big-name IPOs will dominate attention ✅Geopolitical uncertainty is still weighing on markets You could be ready and still get overlooked. 3. Preparation starts 18–24 months out This isn’t a last-minute decision. If IPO is even a consideration, you need: ✅Strong reporting ✅Solid controls ✅A disciplined finance function By the time you decide it’s already too late to start. 4. Consistency > hype Before going public, CFOs agreed you need: ✅Predictable performance ✅6–8 quarters of hitting targets ✅Strong YoY growth ✅A credible leadership team One good year won’t cut it. 5. The CFO hire is critical At minimum: public company experience Ideally: someone who’s been through an IPO That experience makes a huge difference. 6. Keep the story simple You don’t need a 70-page deck. The best companies: ✅Focus on a few key metrics ✅Tell a clear, compelling story Clarity wins. 7. Be transparent, always Investors will find the issues. If there’s a weak spot, own it early. Trying to hide it will hurt your valuation more later. There’s momentum in the public markets again. But just because you can go public… doesn’t mean you should. The best companies don’t chase IPOs. They build options #cfo #roundtable #newyork

For companies eyeing the 2025 IPO market 👀 are you thinking about internal comms? If not, you should be. This is often overlooked as pre-IPO companies hyper-focus on investor relations and other external stakeholders. Fumbling employee comms before, during and after your IPO can create major reputational risk and alienate your teams— so you should start planning now. It’s a tricky balancing act: appealing to all audiences authentically when they each want something different. If you’re not careful, you can end up disappointing everyone. A few things to think about: 🔸Align Messaging Across Audiences: Establish processes to closely align internal and external comms as you prepare for IPO. Employees should hear the same core narrative as investors and external stakeholders. 🔸 Employee Communication Guidelines: Establish standards for how employees can and cannot discuss business performance internally. Define what constitutes sensitive information (e.g., financials, projections, confidential client data) and ensure everyone understands the legal and reputational risks of improper disclosures. SEC compliance training and a confidentiality agreement about earnings, forecasts, and material non-public information are musts. 🔸 Prepare for Leaks: As sensitive information circulates internally, leaks to the media or investors become more likely. Have a proactive plan for managing internal communications that get out into the public domain, and mitigate the impact of any breach. 🔸 Transparency on the Transition to Public Life: Communicate openly about what it means to be a public company—everything from increased scrutiny to shifts in culture and operational priorities. Address how this affects day-to-day life and long-term career growth.  🔸Set Realistic Expectations About Financial Outcomes: Manage employee expectations about stock performance and what it means for them in the short and long term. Educate them about lock-up periods, stock volatility, and the importance of focusing on long-term value creation. The bottom line: internal comms is just as important as external comms in the lead-up to an IPO and beyond it. What else is a must-have internal comms strategy for those who've gone through this process? #IPO #internalcomms #reputation

Key Criteria for a Successful IPO As companies consider going public, understanding the key criteria for a successful Initial Public Offering (IPO) is crucial. Here are some essential factors to keep in mind: 1. Strong Financial Performance Investors want to see a history of robust financial results, including consistent revenue growth and profitability. Solid financial health instills confidence in potential investors. 2. Market Timing Timing can significantly impact the success of an IPO. A favorable market environment, characterized by investor enthusiasm and favorable economic conditions, can lead to better valuation and demand. 3. Clear Growth Strategy Companies should articulate a compelling growth story. This includes a clear vision of how they plan to use the funds raised from the IPO to drive expansion and innovation. 4. Regulatory Compliance Ensuring full compliance with legal and regulatory requirements is essential. This not only builds trust with investors but also mitigates the risk of future legal challenges. 5. Experienced Management Team A strong and experienced leadership team can instill confidence in investors. Their track record in navigating challenges and driving growth is a key differentiator. 6. Robust Investor Relations Strategy Engaging with potential investors before the IPO and maintaining transparency throughout the process can help build strong relationships and generate interest in the offering. 7. Valuation Strategy Careful consideration of the company’s valuation is critical. Overpricing can deter investors, while underpricing can leave money on the table. Finding the right balance is key. 8. Market Positioning Understanding your industry landscape and positioning your company effectively can make a significant difference in attracting investors. Highlighting competitive advantages is essential. As we navigate this dynamic environment, it’s important to remain informed and strategic. Because going public isn’t just a financial milestone …it’s a moment of truth. Where vision meets scrutiny, strategy meets scale, and leadership is tested publicly. #IPO #Investment #Finance #PublicOffering #Growth

SEBI Board Decisions — IPO & LODR (September 2025) The SEBI Board has approved important changes impacting IPO norms under SCRR & ICDR and materiality thresholds under LODR. Here’s a crisp summary with implications: 📌 IPO Framework (SCRR & ICDR) Existing Framework: Fixed % of Minimum Public Offer (MPO) for all IPOs, often forcing large issuers into heavy dilution. 25% Minimum Public Shareholding (MPS) to be achieved within 3 years (uniform for all). 30% of QIB book reserved for anchor investors, with no domestic split requirement. Proposed Changes: Graduated MPO → Based on post-issue market cap. Very large IPOs can list with smaller floats. Extended MPS timelines: < ₹10,000 crore mcap → 2 years ₹10,000–1 lakh crore → 3–5 years > ₹1 lakh crore → up to 10 years Anchor investors: 40% of QIB book reserved for anchors One-third for domestic mutual funds Balance for LICs/pension funds More anchors permitted in very large IPOs Implication: Greater flexibility for large issuers while ensuring deeper domestic institutional participation. 📌 LODR — Related Party Transactions (RPT) Materiality Existing Rule (uniform): An RPT was “material” if it was ≥10% of consolidated annual turnover or ₹1,000 crore (whichever lower). Applied the same way to all companies — small or large. Proposed Rule (scale-based): Thresholds now depend on the size of the listed company. Smaller companies → relief: Higher thresholds, fewer RPTs will be classified as “material.” Larger companies → stricter norms: Lower thresholds, more RPTs to be classified as “material.” Implication in practice: Small company (turnover ₹500 crore): Earlier, ₹50 crore RPT (10%) was material. Under new rules, the bar is higher — such transactions may no longer need shareholder approval/disclosure. Large company (turnover ₹1,00,000 crore): Earlier, ₹1,000 crore RPT (1%) triggered materiality. Now, thresholds will be tighter — even smaller transactions may need approval/disclosure. ✅ In short: Smaller companies → easier compliance Larger companies → tighter scrutiny #sebi #ipo #lodr #icdr #easeofbusiness #companysecretary #rpt #relatedpartytransaction #listedentity