ISSUERS' GUIDE

The initial public offering is the company's initial listing on the stock exchange and at the same time a chance to raise a large amount of capital. During the public offering of shares, the company sells securities to the general public, both to individual and professional investors. They thus provide the company with the means to realize known intentions. The offered shares can be existing, newly issued or a combination.

The main advantages of the public offering of shares include the optimization of the capital structure. In particular, raising new capital without jeopardizing the company's cash flow. That is, without a credit burden. In addition, after a successful listing, the company may proceed with a secondary subscription of shares, and thus raise additional capital. It thus serves as a "new liquid M&A currency". Many foreign companies also use admission to the stock exchange as an opportunity to involve management and employees in the form of employee shares. The public offering of shares is a way to increase prestige and build a brand or increase interest among job seekers. Last but not least, admission to the stock exchange brings the possibility of optimizing the capital structure and easier conversion thanks to the public listing of shares.

The very process of the company's IPO is time-consuming, financially and managerially demanding. Only those companies that are fully prepared will be able to take full advantage of all the possibilities of entering the stock exchange. Listing on the stock exchange also imposes new obligations on the company in the administration and management of the company, especially with regard to transparency. New investors with voting rights will also join the company with the subscription of shares.

There is no exact template that a company interested in IPO should fit into. The key to success is to arouse investor interest. They buy the "promise of future profits." Therefore, it must be an attractive, promising and understandable intention that can convince and attract investors. The company must be mature enough to be able to meet its obligations and be able to continue to cooperate and communicate with its investors on a regular basis.

The easiest way is to contact the Prague Stock Exchange and ask for an independent evaluation of whether your company is suitable for the primary public offering of shares. You can get an independent assessment by contacting us (contact details above) or by submitting a form (shown above).

The Start market is intended for smaller innovative companies with a value of CZK 25 million or more. You can also rank among the exceptional Czech companies with which you can grow. More information about START Market at www.pxstart.cz

Capital markets are globalized today and large institutional investors have access to all standard stock exchanges without distinction. The choice of market is therefore more a matter of rational consideration between the cost ratio, the quality of service and the aftercare that the company will receive from the stock exchange. Thanks to its high-quality and cost-effective service or connection with global institutional capital, the Prague Stock Exchange is a clear choice for Czech companies, albeit with global business.

The key entity is the IPO manager, typically an investment bank and other members of the stock exchange from the financial segment. The manager is the leader and coordinator of the entire external team. Determines the share price, the volume of shares subscribed and the target market. The right choice of the issue manager is key to a successful public offering of shares.

Before selecting a manager with whom the company will work closely on the public offering of shares, the company should have at least a general idea of which investors it wants to primarily address. The breadth and distribution of the primary offer is not affected by the reach of the chosen stock exchange, but by the possibility of presenting the issue manager (typically an investment bank). It can focus, for example, on local institutional investors, foreign institutional investors or retail. You can find the list of members of the Prague Stock Exchange at these pages in the „About the Market“ chapter..

The valuation of the company within the primary offer will be ensured by the IPO manager in close cooperation with the issuer. It is always a matter of finding the right compromise between the expectations of the company itself and potential investors. Determining the right price is absolutely key to a successful public offering of shares.

Investors invest their resources in the company and in return they want to be informed about significant events in the company. The basic information obligations arise from the law. In particular, it is a regular publication of economic results (frequency depends on the chosen market), annual reports and all information that may affect the value (price) of the company's shares.