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What is an IPO? This is an important question that many investors ask when starting to learn about the stock market. This process is not only an opportunity to mobilize capital but also opens up new development strategies for businesses. In the following article, Long Phan will provide basic knowledge from which to answer important questions about an IPO to help you make effective and safe investments.
IPO (Initial Public Offering) is a specialized term that refers to the first issuance of shares by a business to the public. According to the Law on Securities 2019, IPO is an important form for businesses to mobilize capital from the stock market.
The importance of IPO is shown in the following points:
According to the provisions of Article 15 of the Law on Securities 2019, when conducting an IPO, businesses need to meet the IPO conditions including:
>>> See more: Popular IPO forms today for businesses.
An IPO process in Vietnam often goes through the following specific stages:
Phase 1: Preparation phase:
Enterprises need to evaluate their capacity by checking the minimum capital requirement of 30 billion VND, analyzing the business results of the last two years and the ability to comply with IPO conditions according to the Law on Securities 2019. At the same time, enterprises need to evaluate their capacity. Enterprises must determine the potential to attract investors, develop a stock issuance plan including the number of shares, expected price and detailed capital use plan.
Phase 2: Appraisal and approval stage:
During the appraisal and approval stage, businesses need to choose a reputable securities company and sign an IPO consulting contract, while determining the scope of underwriting services.
Next, the business prepares legal documents, including drafting a prospectus, preparing audited financial reports and collecting necessary legal documents. Document components include:
This dossier will be submitted to the State Securities Commission for appraisal. After checking the validity and transparency of the dossier, the Commission will issue a license to issue shares if all requirements meet the standards.
Phase 3: Release phase:
During the stage of determining the price and issuance time, businesses need to analyze the market to determine a reasonable issuance price range and choose the appropriate issuance method (auction or offering).
At the same time, businesses must build a detailed release schedule. Next, information disclosure includes officially announcing the issuance, promoting information to investors and organizing roadshows to introduce businesses and contact with potential investors.
Finally, the enterprise opens a subscription to buy shares, receives applications for registration and allocation of shares, and controls the distribution process to ensure fairness and transparency.
Phase 4: Post-release phase:
During the listing stage on the stock exchange, businesses need to complete listing documents and transaction registration, and determine the first trading date.
After completing the listing process, businesses must publish issuance results reports, periodically disclose information and ensure compliance with regulations of management agencies, maintain transparency and respond to requests. Meet legal requirements throughout the trading process on the floor.
Before deciding to invest, investors need to carefully consider a number of important factors to accurately assess the potential and risks of the business. Here are important factors to consider before making an investment:
Long Phan provides in-depth consulting and support services to investors regarding IPO. With a team of experienced experts, we are committed to supporting customers in solving problems when making investments.
We provide services including:
Understanding IPOs is an important foundation for every investor. If you need detailed advice on IPO from a team of experts, please contact Long Phan immediately at the hotline: 0906735386 for professional and timely support. We are ready to accompany you to conquer all investment opportunities.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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