Basic IPO process in Vietnam

The IPO process (Initial public offering of shares) in Vietnam is basically an important step in the development strategy of companies. This process not only helps businesses mobilize capital effectively but also opens up opportunities to increase shareholder value, enhance reputation and develop sustainably. The following article will guide customers step by step in detail about the process and conditions for implementing an effective IPO.

Conditions for conducting an IPO

IPO (Initial Public Offering) is a strategic activity for businesses to change their ownership model and raise capital. According to the provisions of Clause 1, Article 257 of Decree 155/2020/ND-CP and the Law on Securities 2019, basic conditions include:

• Total value of shares registered for sale is at least 50 billion VND;
• Have an issuance plan and a plan to use capital obtained from the offering;
• Must be supervised by a custodian bank;
• Shares offered to the public must be listed on the Stock Exchange after the end of the offering;
• A securities investment fund management company must have at least 02 executives with fund management practice certificates, and must not be warned, controlled, suspended or have not taken remedial measures according to the decision on sanctioning violations of securities laws.

Detailed IPO procedure

Pursuant to the provisions of Article 258 of Decree No. 155/2020/ND-CP, the IPO process in Vietnam is carried out according to the following steps:

Step 1: Submit IPO registration documents to the State Securities Commission. The dossier components include the following contents:

• Certificate of stock offering registration according to Form No. 100 (Appendix to the Decree).
• Company charter according to regulations of the Ministry of Finance.
• Prospectus and summary prospectus according to regulations of the Ministry of Finance.
• Custody and supervision contract between the custodian bank and the securities investment fund management company.
• Share distribution contract between the fund management company and the distribution agent, accompanied by the certificate of registration of distribution activities and related documents.
• List of expected personnel and company executives, accompanied by personal information and criminal records of members of the Board of Directors and General Director (updated no more than 06 months).
• Documents soliciting investor opinions (if the first General Meeting of Shareholders is not held), including information on stock listing, Board of Directors structure, and other contents.
• Underwriting commitment (if any) and advertising documents and introductory information about the offering fund (if any).

Step 2: Document appraisal: From 30 days from the date of receipt of the registration dossier, the State Securities Commission is obliged to issue a certificate of public stock offering to the registering organization, in case of Refusal must be made in writing and clearly state the reason.

Step 3: Issue the Certificate of registration for offering.

Step 4: Publish the release announcement.

Important Notes When Conducting an IPO

In order for the IPO process to be successful and avoid unnecessary problems, businesses need to pay attention to:

• Transparency of financial information: Public, clear and complete financial information, including financial reports that accurately reflect business operations, assets, liabilities and profits. This helps investors, shareholders and regulators easily evaluate and make decisions.
• Strictly comply with legal regulations: Ensure all financial and accounting activities comply with current legal regulations, including tax, auditing and industry-specific regulations. Any violations must be handled promptly.
• Build management and development strategies: Long-term and short-term strategic planning for sustainable development, optimizing business operations, improving financial performance and increasing shareholder value. Financial management is flexible and has the ability to adjust when necessary.
• Accurate financial reporting: Ensure financial reports comply with international accounting standards, accurately reflecting the organization’s financial situation. Includes balance sheet, income statement and cash flow statement to help investors make informed decisions.
• Choose a reputable underwriter: Choose an experienced and reputable underwriter to help the IPO process go smoothly, ensuring success in raising capital.
• Transparency about capital use purposes: Develop a clear and transparent plan for using capital obtained from the IPO, helping investors feel secure about investing in the company.

>>>Reference: Things to keep in mind when investing in pre-IPO stocks.

IPO process consulting services at Long Phan

Long Phan provides comprehensive IPO consulting services, including:

• Support in drafting documents to register for the initial public offering of securities;
• Consulting on the fastest and most effective IPO issuance strategy for businesses;
• In-depth advice on rights and obligations when issuing IPOs for businesses;
• Representing customers to submit and explain documents to competent authorities;
• Consulting on management plans for common risks encountered when issuing an IPO.

The IPO process is a complex journey that requires high expertise. You need to choose a reputable consulting partner to ensure success. Long Phan is ready to accompany businesses in each of these important steps. If you need in-depth advice on IPO for your business, please contact Long Phan immediately via the hotline: 0906735386 to receive professional and quick advice on IPO implementation strategy.