An initial public offering (IPO) is a process in which a company publicly offers its shares to investors for the first time with a view to their admission to trading on a regulated market or a multilateral trading facility (MTF). For shares to be listed on a stock exchange, the company must be organized as a joint-stock company, and ownership records for dematerialized securities in electronic form are maintained by the Central Depository and Clearing Company (CDCC).
Bonds, as debt securities, may also be offered to the public; however, the term IPO is not used for bonds. Bonds are subject to specific admission requirements and reporting obligations that differ from those applicable to shares.
A developed secondary market ensures the liquidity of securities and enables more efficient price formation. The level of liquidity is significantly influenced by the ownership structure and the proportion of shares in free float. More liquid shares are more likely to be included in stock exchange indices, thereby becoming more visible to domestic and international investors
Questions to help decide whether a company is ready for an IPO and exchange listing:
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Is the company already a joint-stock company, or is it likely to become one soon?
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Are the current owners willing to sell their equity interests in the company?
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Is the company prepared to meet high corporate governance standards?
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Is the company prepared to meet business transparency and reporting standards?
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Is the company's management prepared to devote sufficient time to communicating with the investment community and investors, and to presenting the financial indicators of the company's performance?
Going public is one of the most important strategic decisions in a company's development.
Via its website the Zagreb Stock Exchange provides an IPO notification service to companies. IPO-related notices are published by the Markets Department, so any queries may be addressed to trzista@zse.hr
