Definition of Going Public
In a narrow sense, going public, or Initial Public Offerings (IPOs), refers to the process whereby a company issues additional shares to investors through a stock exchange, in order to raise funds for business development.
When a large number of investors subscribe to new shares, the shares need to be allocated by lottery, also known as drawing new shares. Subscribing investors hope to sell at a price higher than the subscription price.
In a broader sense, going public includes not only the company's public (non-directed) issuance of shares but also the launch or introduction of new products or services in the market.
Benefits of a Company Going Public
After listing, a company acquires capital from the capital market, significantly reducing its debt-to-asset ratio. Dependence on bank loans decreases, and the company’s credit rating with banks improves. The company also becomes less worried about shortfalls in its funding chain when there are sudden policy changes.
The ability to finance and refinance through the public offering brings about a multiplier effect on capital. Many development opportunities are gained through refinancing after listing.
Upon listing, a company is required to introduce scientific corporate governance and establish a set of standardized management and financial systems, which positively impacts the improvement of the company's management level.
Free publicity and advertising effect. Once a company goes public, it becomes a public entity, which helps enhance the company's brand and increases its visibility.
Using stock options to motivate employees, attract high-quality staff, and increase employee loyalty.
Mercury International's professional team can assist companies in facing the challenges of initial public offerings (IPOs) and restructuring for listing. Our services include:
1.Providing advice on group restructuring;
2.Offering consultation on pre-IPO financing activities;
3.Providing assessment and review services for internal controls and corporate governance;
4.Offering tax compliance review services;
5.Providing consultation services on preparations related to operations, financial management, and the management team;
6.Assisting in liaising with IPO sponsors and other professional advisors related to listing.
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