The process for a company to get listed on the Singapore Stock Exchange is straightforward and there are professionals that a company can hire to ensure the success of the incorporation process.
The steps to get listed on the Singapore Exchange are listed as follows
- Due-Diligence: This process involves a comprehensive analysis of every aspect of the company including company’s valuation. It is conducted by a professional accountancy firm registered and licensed in Singapore. A fair value of the company and the number of shares is determined at the end of this process.
- IPO: The ones who wish to buy shares of the company are given an opportunity to do so when the company comes out with an IPO. This process requires the company to take the help of a broker who takes care of the underwriting process. Underwriting is an agreement between the company and the broker wherein the broker agrees to promote and sell the company’s shares for a pre-determined commission.
There are two parts of the process: Pre-submission preparation which takes around 4-9 months and post-submission approval and listing which usually takes around 5-7 weeks depending on the nature and intricacies of the business.
- Appointment of a Singapore based Financial Institution as the Lead Manager: Company is required to appoint a Singapore based financial institution as the Lead Manager who manages and takes care of the entire IPO process. The Lead Manager or sponsor’s duties include submitting the listing application to SGX and to collaborate with the organization on all IPO related matters.
- Hiring a Lawyer and Certified Public Accountant: The company needs to hire a lawyer who ensures that the complies with all the legal aspects of the process. Additionally, a CPA is required for the IPO’s launch and also to perform all other accounting work on behalf of the company.
Sometimes, there may be certain issues which may lead to delays; therefore, it is advisable to communicate and collaborate with SGX to identify those issues before submitting the listing application.
- .Evaluate financial performance, track record of growth and long-term business plan
- Evaluate the market conditions and options available, debt vs debt financing, private placement, strategic business alliances
- Evaluate the requirements for corporate reorganisation
- Availability of the appropriate resources and quality
- Meeting and discussion with the professionals and advisers'
- Putting together the appropriate management and finance team
- Building the right financial and operational infrastructure
- Establishing the appropriate corporate governance structure
- Consider investor relations and public relations strategies
- Appointment of professionals and advisers
- Putting the financial statements right and addressing accounting and tax challenges and issues
- Putting together the IPO timetable
- Due dilligence
- Drafting of prospectus2
- Completion of corporate reorganisation
- Preparation of financial information
- Recruiting non-executive board members and audit committee
- Discussion on pricing and valuations with advisers
- Managing of the "brand" and market positioning with public relations adviser
- Submission and lodgement of prospectus with the authorities and regulators
- Addressing queries and concerns of the authorities and regulators
- Conducting the IPO road shows
- Launching the IPO
Listing criteria for mainboard listing
Listing criteria for mainboard listing:
- Quantitative Criteria: If a company meets any one of the three quantitative criteria, then it can seek for mainboard listing on SGX.
- “Criteria 1” - pre-tax profit of at least S$30m for the latest financial year and has operating track records of at least three years.
- “Criteria 2” - be profitable in the latest financial year, has operating track records of at least three years and market capitalization of at least S$150m at the time of the IPO.
- “Criteria 3” – has generated operating revenue in the latest financial year and market capitalization of at least S$300m at time of IPO.
- Qualitative Criteria: SGX requires a company to meet a number of qualitative criteria as listed below.
- The company must be a going concern and the accounts must be audited.
- Healthy financial position with positive cash flow.
- All debts owing to the company by its directors, substantial shareholders and related companies must be fully repaid.
- Strong management and team.
- Have at least two non-executive independent directors, 1/3 of board should consist of independent directors.
- Resolve all conflicts of interest prior to IPO.
- Adequate disclosure in prospectus.
Criteria for Catalyst listing:
- There are no quantitative criteria for catalyst listing.
- Qualitative Criteria: In order to seek catalyst listing, the sponsor has to take into account several qualitative factors, including the following:
- Whether directors and executive officers of the company have appropriate experience and expertise to manage the company.
- Character and integrity of the managing board of the company.
- Have at least two non-executive independent directors, 1/3 of board should consist of independent directors. A foreign listing applicant should have at least one director resident in Singapore.
Adviser1 : Professional and advisors include underwriters/lead managers, sponsors, reporting auditors, lawyers, and public relations firms.
Prospectus2 : A prospectus includes complete, true and fair disclosures about the company that wants to get listed. It includes business and industry description, sales and marketing information, products and production methods, employees information, financials and the risks associated.
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