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2. Executive Summery Going Public is like planning a child. Once the idea catches hold, it just grows and grows. Your life becomes more complicated. It will cost you a lot of money. can be a very, very rewarding experience Anonymous The main purpose of the report is to provide a basic idea of Initial Public Offering (IPO). In this report we try to find out, what are steps a company has to go through for IPO, according to the Security Exchange Commission (public issue rules 2006). At beginning of this report we give a little idea about IPO, then we descried why company go for IPO, after then we go through the IPO process step by step, and finally we draw a flowchart of IPO process with time allocation. Generally companies go for IPO to raise capital and other reasons are liquidation of the shares of the company, expansion of the company into new territories or markets, expansion of the company either by acquisition or merger, and levergaing future sales or business to create extra value for the company. Base on the SEC consent we can divide the IPO process in two parts; one is work before Consent and another in work after consent. Work Before

Consent consists of Selection of Advisors, Completion of Valuation and restructuring, Selection of Bankers to the Issue, Selection of underwriters, Collection of NOC from Lenders, Audit of Accounts, Credit Rating Report, Agreement with CDBL, Approval from Sponsors, Refund warrant guarantee, Draft Prospectus, Consent from SEC, and Application Submission. And Work After Consent consists of Submission of prospectus, Announcement for the investor, Provide full prospectus, Subscription period, Application for listing, Transaction rate, In case of under subscription, Application to Stock Exchanges for Listing, and Approval of listing.

3. II. Initial Public Offering (IPO) process 1. Procedure The Company which is going to issue shares to the publics holds an organizational meeting to reach an agreement in final decision of purpose, size of offering, number and type of shares authorized, also the agreements with company and principal shareholders. Generally, IPO involves one or more investment banks as "underwriters". The role of underwriters is very important. They are intermediaries between an issuer of a security and the investing public. There are many forms of underwriting. However, in Vietnam, firm commitment contract and bought deal are popularly used. In these contracts, the underwriters guarantee for all the shares of the organization. The underwriters will buy all the number of shares or the remaining shares after the issuing period. 2. Auction In order to do the auction, the firm must determine the value of new securities, which is based on performance and potentiality assessment from sponsoring organizations, audit firms and consulting organizations to give the most suitable initial price. There are many methods to determine the initial price such as asset accumulation, market value however DCF( discounted cash flow) and P/E (price earning) are usually used in Vietnam. Both two methods have advantages and disadvantages, so the issuers usually take the average result of two methods to get the highest benefit. After defining the stock price, the company publicizes businesss operation information before the auction session at least 20 days. Investors voting by person attendance forms can be received directly by the firm (if the auction held at the enterprise) or intermediary financial institutions (in case of auction in intermediary financial institutions) or the Securities Trading Center / municipal securities transactions and specified agents, voting by mail conforms the auction organizer regulations. The third step is carrying out the auction and determining the results.

4. IPO Advantages
There are several advantages to going public: 1) Access to capital One of the most common reasons for going public is to raise primary capital to fund organic growth, repay debt or fund an acquisition. Further direct results include the following:

Once the company is public, it has access to an entirely new, incredibly deep and liquid source of capital for any future needs it may have. Adding equity to the companys capital-raising toolkit helps equip the company with the tools to achieve optimal capital structure. After the company has been public for one year, it will be eligible to access the equity capital markets on demand via a more expeditious process through a shelf registration statement.

2) Increased Liquidity Listing on the NYSE has numerous benefits, not only for the company, but also for its shareholders. The IPO can be structured such that existing owners of the company can exit their position and receive proceeds for their shares. In addition, once the company is public, the existing owners have a public marketplace through which they can liquidate their holdings in a straightforward and orderly fashion at any time. 3) Branding event By listing on the NYSE, the company will receive worldwide media coverage through the financial markets, which provide constant live coverage on publicly traded companies. In addition, research analysts at broker-dealers will begin to write reports on the stock and the company, thus raising the profile of the company. Broader coverage across various sources will likely enhance the companys visibility, market share and competitive position. 4) Public currency for acquisitions Once the company is public, it can use its common stock to acquire other public or private companies in conjunction with, or instead of, raising additional capital. 5) Enhanced benefits for current employees Stock-based compensation incentives align employees interests with those of the company. By allowing employees to benefit alongside the companys financial success, these programs increase productivity and loyalty to the company and serve as a key selling mechanism when attracting top talent. Furthermore, issuing equity-based compensation will allow the company to attract top talent without incurring additional cash expenses.

IPO benefits
Main advantages of a public company are: 1. Access to capital to fund growth Public placement of shares on a stock exchange allows the company to attract capital to fund both organic growth (modernization and upgrade of production facilities, implementation of capital-intensive projects) and acquisitive expansion. If retained earnings and debt funding are insufficient, IPO becomes one of the most realistic and convenient ways to secure the continuing growth of the business. It provides access to a massive, timeless pool of capital and boosts the investment credibility of the business. 2. Creation of liquidity and potential exit for the current owners Formation of a public market for the companys shares at fair price creates liquidity and provides an opportunity to sell the shares promptly with minimal transactional costs. The private owners of the company can dispose of their stakes in the business both during an IPO (this route is often taken by the minority financial investors such as venture or private capital funds) and at a later stage (this is often preferred by the majority shareholders). 3. Maximum value of the company Normally, an IPO is an offer to a large number of institutional and retail investors to become shareholders of the company. The very multitude of large investors and their confidence in the liquidity of their investment in a public entity assure the current owners of a private company about achieving the maximum possible valuation of the business at the time of an IPO or afterwards. 4. Enhancement of the companys public profile Listing on a recognised stock exchange means that the business will receive wide media coverage, usually a very favourable one, thus increasing the companys visibility and recognition of its products and services. The companys activities will also be reflected in the reports by professional financial analysts. Such public profile supports liquidity of the shares and contributes to the expansion of the business contacts. It also helps to increase confidence among the companys business partners. 5. Improvement in debt finance terms For domestic (Ukrainian or other CIS country-based) financial institutions used to working with the low-transparency businesses and often inadequate financial reporting a company listed on a recognised stock exchange becomes a desirable and reliable partner. Banks are often ready to extend loans to public companies in larger amounts, under smaller collateral, for longer maturities and with lower interest rates. Even the largest and most prestigious banking

institutions are keen to work with public companies whose transparency and corporate governance serve as additional factors of confidence for banks and other suppliers of credit. 6. Extra assurances for partners, suppliers and clients Partners and contractors of a public company feel more confident about its financial state and organisational capabilities as compared to those of a non-transparent private business. Partners take additional comfort in the fact that the public company has gone through rigorous legal, financial and corporate due diligences all of which are required for a successful completion of an IPO. Confidence among partners and contractors is a sound foundation for stable and predictable business relations with the public company, and allows the latter to obtain additional leverage in negotiating better terms for doing business. 7. Enhanced loyalty of key personnel Publicly available information about the share price of a public company allows development of employee motivation schemes based on partial remuneration of staff in the form of participation in the equity capital (for example, share options). Equity-based incentive schemes stimulate the key personnel to become more efficient in their work in order to support the companys growth rates and profitable development which in turn increase the operational and financial efficiency of the company and its market value. 8. Superior efficiency of the business Conduct of various due diligences during the IPO process requires a thorough and comprehensive analysis of the companys business model. During the IPO implementation process, certain internal changes take place, including modification of the organisational structure; selection of the key personnel and delegation of responsibilities; improvement of internal reporting and controls; as well as critical evaluation of the efficiency of the entire business. Normally, such extensive internal efforts result in significant improvements of the communication system, management and controls; they also help eliminate any previously hidden shortcomings in the internal functioning of the business.