SUBJECT: FINANCIAL MARKETS AND INSTRUMENTS

SUBJECT CODE: FN529

TOPIC: COMPARISON OF IPO LISTING PROCESS IN INDIA AND UK

PREPARED BY: SECTION B; GROUP-5 [PGDM 2023-25]

1. HIMANSH GUPTA - 23 PGDM-BHU086

2. SANJANA AGARWAL - 23 PGDM-BHU108

3. SHUBHAM GOENKA - 23 PGDM-BHU114

4. UTSAV PARAKH - 23 PGDM-BHU123

 ACKNOWLEDGEMENT

The success and conclusion of this project required a lot of direction and assistance from many

people, and we are really privileged to have got this all along the completion of our project. All

that we have done is entirely owing to such monitoring and help and we would not forget to thank

them.

We appreciate and thank Prof. Debidutta Pattnaik, for providing us an opportunity to accomplish

the project work and giving us all help and supervision, which made us to complete the project

suitably. We are exceedingly thankful to him for schedule handling the corporate affairs.
 CONTENTS

SL NO. PARTICULARS PAGE NO.

1. INTRODUCTION 4

2. ABOUT INDIA 5-6

3. IPO LISTING PROCESS IN INDIA 7-17

4. ABOUT UK 18- 20

5. IPO LISTING PROCESS IN UK 21- 35

6. CONCLUSION 36

12. REFERENCES 37
 INTRODUCTION

For businesses looking to raise money from the public markets, the Initial Public Offering (IPO)

listing procedure is an important first step. An initial public offering (IPO) is conducted using a

variety of procedures in different nations because each one has its own set of laws, markets, and

customs. We will compare the initial public offerings (IPO) listing procedures of India and the

UK, two distinct but significant economies.

The expansion of its entrepreneurial ecosystem and investor appetite have led to a surge in initial

public offering (IPO) activity in India, one of the major economies with the fastest rate of growth

in the world. On the other hand, the UK has long served as a hub for global capital raising and

investment thanks to its developed financial markets, which are centered around the London

Stock Exchange (LSE).

This comparative analysis will examine several facets of the initial public offering (IPO) listing

process in both nations, encompassing regulatory mandates, listing protocols, disclosure

responsibilities, investor safeguarding mechanisms, and market dynamics. Gaining an

understanding of the parallels and differences between these two jurisdictions will be helpful in

interpreting the subtleties and intricacies of IPO operations in various regulatory contexts.

Through an analysis of the IPO listing procedures in India and the UK, our goal is to clarify the

legal structures and market forces that influence the path taken by businesses as they go from

private to public ownership in these two very different economic environments. For market

players to navigate the complexity of international capital markets, such as issuers, investors,

regulatory bodies, and financial intermediaries, such insights are essential.

 India's Economic Rise: A Decade of Impressive Growth

The past decade has been a period of remarkable progress for the Indian economy. In 2014, India

stood as the world's 10th largest economy with a GDP of $1.9 trillion. Fast forward to 2024, and

India has climbed an impressive five spots to become the 5th largest global economy, boasting

an estimated GDP of $3.7 trillion. This significant achievement is even more noteworthy

considering the challenges India has faced, including the global COVID-19 pandemic and pre-

existing economic imbalances.

Stock Market Boom

India's economic rise is further reflected in the success of its stock exchanges. The National

Stock Exchange of India (NSE) has emerged as a global leader, holding the title of the world's

largest derivatives exchange for a record fifth consecutive year in 2023 (as per the Futures

Industry Association). Additionally, the NSE ranked third globally in the equity segment by

number of trades in 2023 (according to the World Federation of Exchanges).

2023 marked a year of milestones for the Indian stock market. The total market capitalization of

listed companies surpassed an impressive $4 trillion mark. The number of small and medium-

sized enterprises (SMEs) listed on the exchange crossed a significant milestone of Rs 1 lakh

crore. The Nifty 50 index, a key benchmark stock market index, surpassed the 20,000 mark for

the first time ever. Furthermore, the year saw a surge in investor participation, with the number

of unique registered investors reaching 8.5 crore by the end of 2023.

Stock Exchange Landscape

The majority of Indian stock market activity occurs on two key exchanges: the Bombay Stock

Exchange (BSE) and the National Stock Exchange (NSE). Established in 1875, the BSE holds

the distinction of being the older exchange. The NSE, founded in 1992 and operational since

1994, has emerged as the leader in terms of trading volume. Despite some minor differences,

both exchanges operate with the same trading mechanisms, trading hours, and settlement

processes.

While the BSE boasts a larger number of listed companies (over 5,300 as of January 2024), the

NSE houses a more select group of roughly 2,200 companies (as of December 2023). Notably,

most of India's major corporations are listed on both exchanges.

Market Indexes

Two prominent market indexes track the performance of Indian equities: the Sensex and the

Nifty. The Sensex, established in 1986, is the older of the two and comprises 30 companies listed

on the BSE. It offers valuable historical data with a base year of 1979. The Standard and Poor's

CNX Nifty, launched in 1996, tracks the performance of 50 leading companies listed on the

NSE.
 The Listing Process of India

OVERVIEW

1. The business files DRHP/DP with the Stock Exchange

Exchange posts the DRHP/DP on its website.

2. The company must submit an application via NEAPS and include all necessary documentation in

accordance with the Exchange's Checklist.

3. Exchange conducts a first review, confirms the application, and looks for answers to any

questions.

4. Exchange grants the Company permission in principle.

5. The company intends to open the issue within a year following SEBI clearance for Main

6. Board issues and Exchange permission for SME issues.

7. The business must provide the Designated Stock Exchange (DSE) with the 1% security deposit

one day before the offering opens.

8. The business allots the shares to the anchor investor (if any) one day before the offering opens.

9. An issue may be available for viewing for a minimum of three days and a maximum of ten days.

10. Issue Close (Working day, or T Day)

11. The Company provides the documentation in accordance with the Exchange's checklist on T+1

working day.

12. Allotment is completed at DSE on a T+1 working day basis.

13. The business files the Listing Documents to the Exchange on T+2 working day.

14. The company submits a Credit Confirmation on T+2 working day to the Depository, which

means that the shares have been dematerialized and are now in the allottee's account. The

Exchange then issues a circular to the Market for the shares to be listed starting on T+3.

15. The Company is listed on the Exchange on T+3 working days.

 Eligibility Criteria for Equity

To list their shares on the NSE through an IPO, companies need to meet specific financial

benchmarks and legal requirements.

 Financial Strength: The company's paid-up capital (the amount shareholders have invested)

must be at least ₹10 crore. Additionally, the total value of the company's shares (market

capitalization) should be at least ₹25 crore.

 Regulatory Compliance: The company must demonstrate adherence to all relevant regulations

established by Indian securities laws (1956 & 1992) and company acts (1956 & 2013). This

includes following any additional guidelines or clarifications issued by governing authorities.

The company or its founders must demonstrate a solid track record of at least three years.

This experience can come from:

 The company itself if it has been operating for three years or more.

 The promoters' (founders') experience, either in India or abroad.

 A previously existing partnership that recently converted into a company, provided it meets

SEBI's specific requirements for such cases.

To verify this experience, the company must submit the following to the NSE:

 Annual reports for the past three years.

 A certificate confirming:

o No referral to financial restructuring boards or insolvency proceedings.

o No approved petitions to wind up the company.

o Positive net worth growth (except for companies planning large offerings exceeding ₹500 crore).

In order for the applicant to list its securities, it must meet the requirements of the

exchange on the following:

  Investor Grievance Redressal Mechanism

The following are the things to think about:

i. The Issuer's listed subsidiaries, the top 5 listed group firms by market capitalization, and the

details of any outstanding investor complaints against them.

ii. There are now mechanisms in place for resolving investor issues, such as the SEBI Complaints

Redress System.

 Defaults in payment

A company's application for listing will also be evaluated considering any defaults by the

applicant, promoters or promotional company(ies), group companies, or subsidiary firms

regarding the payment of interest and/or principal to the holders of debentures, bonds, or fixed

deposits. Until the applicant company has satisfied all outstanding debts related to principal

and/or interest payments, its securities may not be listed.

1. The cooling-off period for rejection

Recent Rejection:

 Companies cannot reapply for listing within six months of a previous rejection by the NSE.

IPO Considerations:

 Companies applying to list within six months of their IPO can leverage their IPO qualification

for listing on the NSE.

 Companies applying after six months will have their market capitalization assessed based on

their performance between the IPO and the listing application.

Pre-application Requirements:
 Companies must ensure they meet all the essential criteria before submitting a listing application

to the NSE to avoid delays. Fulfilling these requirements helps guarantee the company's

readiness for public trading on the exchange.

The various steps to be taken include:

In-principal approval of draft prospectus

 Along with the IPO Vetting Checklist documents, companies must submit a draft prospectus for

their listing application.

 This prospectus should be created following the current guidelines set by SEBI's ICDR

regulations and any other relevant laws, notices, or directives regarding prospectus preparation

and issuance.

 Issuers should pay close attention to the Companies Act, Securities Contracts Regulation Act,

SEBI Act, and any related subordinate legislation.

 The NSE's review of the draft prospectus focuses solely on ensuring it adheres to the exchange's

listing requirements. NSE approval of the draft prospectus doesn't constitute approval under any

other laws or regulations.

 Finally, companies must also submit the SEBI letter with comments on the draft prospectus or

offer letter (if applicable).

IPO Listing Application:

To list their shares on the NSE following an IPO, companies must submit a formal application

for trading admission. This application requires using the specific forms provided by the NSE,

along with any additional forms mandated by the relevant authorities at any given time.
 Security Deposit for New Listings (NSE Only):

Companies applying for their first public offering (IPO) on the NSE, as the designated stock

exchange, need to pay a security deposit. This deposit ensures the company fulfills all listing

requirements within a set timeframe.

 Deposit Calculation: The deposit is 1% of the total value of securities offered to the public

and/or existing shareholders.

 Payment Options:

o 50% of the deposit must be paid in cash directly to the NSE.

o The remaining amount can be covered by a bank guarantee approved by the NSE, with a

maximum cash portion of ₹3 crore.

 Refund Conditions: The deposit is fully refunded (without interest) within 15 days after the

listing period ends, if:

o The company fulfills all listing requirements and obligations under the Companies Act, 2013.

o A No Objection Certificate (NOC) from SEBI is obtained and submitted to the NSE.

 Deposit Forfeiture: If the company fails to meet the listing requirements within the timeframe,

the NSE has the discretion to forfeit the entire deposit. This doesn't relieve the company of its

obligations for listing.

In essence, the security deposit serves as a guarantee for the company's commitment to

completing the listing process successfully.

A. Listing Fee Structure based on Paid up Capital:

 Listing Fee Tiers:

The NSE has a tiered structure for listing fees based on the company's total paid-up capital,

which includes shares, bonds, debentures, and debt capital.

 Companies with over ₹500 crore in paid-up capital pay a minimum fee of ₹7,35,000.

Additionally, there's a fee of ₹4,800 for every increase of ₹5 crore (or any part thereof) in their

paid-up capital.

 Companies exceeding ₹1,000 crore in paid-up capital incur a minimum fee of ₹12,20,000. For

any increase of ₹5 crore (or more) in their paid-up capital, there's an additional fee of ₹5,125.

And

B. Fee structure based on Market Capitalization

1. For listed firms with market capitalizations more than ₹2500 crores, an incremental fee of ₹5000

per ₹1000 crores would be assessed.

2. The market capitalization-related additional fee is limited to ₹20 lakhs (not including the paid-up

capital component).
3. Market capitalization will be calculated in the following way for the purposes of this

computation:

 Monthly average market capitalization = Average of Highest market capitalization during the

month and Lowest market capitalization during the month

 Alternatively, one can calculate the average of the aforementioned figures for the twelve months

leading up to the invoice date, which is April 1, XXXX to March 31, XXXX.

** Excluding statutory taxes

India: Gross domestic product (GDP) in current prices from 1987 to 2028(in billion U.S. dollars)
 Number of Amount Raised (Rs Successful Failed

Year IPOs Cr) IPOs IPOs

2024

* 19 12,090 19 0

2023 58 49,437 57 1

2022 40 59,939 40 0

2021 63 1,19,882 63 0

2020 16 26,628 15 1

2019 16 12,687 16 0

2018 25 31,731 24 1

2017 38 75,279 38 0

2016 27 26,501 26 1

2015 21 13,513 21 0

2014 7 1,201 5 2

2013 5 1,284 3 2

2012 13 6,834 11 2

2011 40 5,977 37 3
 2010 66 36,362 64 2

2009 22 19,307 21 1

2008 39 18,340 36 3

2007 108 33,946 104 4

Number of IPOs
120

100

80

60

40

20

0
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
INDEX VALUE

CAPITAL MARKET VALUE

 IPO LISTING PROCESS IN THE UK

The UK's Economy: A Global Powerhouse

The United Kingdom boasts a large and influential economy, ranking sixth in the world by total

value (GDP) and playing a significant role in global trade. While manufacturing has declined

somewhat, the service sector, particularly financial services, has become a major driver of the

UK's economic strength. London, a center for international finance, houses the London Stock

Exchange (LSE), a leading global stock market.

A History of Trade and Investment

The UK has a long history of being a major trading nation, and this continues today. In 2022, it

ranked among the top four countries for both imports and exports. The UK also plays a key role

in foreign direct investment, attracting investment from other countries and investing in

businesses abroad.

The London Stock Exchange: A Global Marketplace

Formed in the 1970s from the merger of several regional markets, the LSE is the UK's primary

stock exchange. It's a truly international marketplace, with companies from over 60 countries

listed on the exchange. The FTSE 100, a stock market index that tracks the performance of the

UK's 100 largest companies by market capitalization, is a key indicator of the UK economy's

health. The LSE plays a vital role in providing market data, setting pricing standards, and

ensuring smooth trading for European stock markets. It also collaborates with exchanges in other

regions to promote open and efficient financial markets worldwide.

 Fig 1: GDP growth curve (1948 TO 2023)

FTSE (Financial Times Stock Exchange)

FTSE 100: A Benchmark for the UK Stock Market

The FTSE 100 is a widely followed stock market index in Europe. Launched in 1984 with a base

of 1000, it has grown significantly, reaching highs above 7,000. Similar to how American

investors rely on indexes like the Dow Jones or S&P 500, many market participants in the UK

use the FTSE 100 to gauge the overall health of the British stock market.

The FTSE 100's value is determined by the combined market capitalization of the 100 largest

companies listed on it. As share prices and company valuations fluctuate throughout the trading

day, so does the index value. Daily movements in the FTSE 100 are measured against the

previous day's closing value.

Many view the FTSE 100 as a key indicator of British company performance and the overall

health of the UK economy. This attracts investors interested in major British firms. While some
companies in the index have international operations, the majority are British and directly

impacted by daily changes in the FTSE 100.

PRICE TREND
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
Jan-14
Aug-14

Dec-16
Jul-17

Apr-19

Jan-21
Aug-21

Dec-23
Nov-19
Oct-15

Oct-22
Mar-15

May-16

Feb-18
Sep-18

Jun-20

Mar-22

May-23
Fig 2: Price trend of FTSE over last 10 years

Fig 3: Sectors of FTSE100

 THE LISTING PROCESS

Taking a Company Public: A Two-Step Process

Taking a company public, also known as listing, involves two key steps. First, the company

needs to apply to the Financial Conduct Authority (FCA) to get its securities approved for

inclusion on the Official List. Second, the company must apply to a recognized investment

exchange (RIE) like the London Stock Exchange's Main Market to have those securities actively

traded.

FCA OFFICIAL LISTING ADDING TO LSE

The FCA: Gatekeeper of the Official List

The Financial Conduct Authority (FCA) is the ultimate authority for companies seeking to list

their securities on the UK's Official List. They establish and enforce the rules (Listing Rules) that
companies must meet to qualify for listing. Additionally, the FCA reviews and approves all

applications for admission to the Official List.

Fig 4: Listing segments categories

Fig 5: Differences between premium and standard listings

 IPO (Initial Public Offering)

An Initial Public Offering (IPO) marks a significant step for a private company. It's the first time

the company offers its shares to the public, allowing it to raise capital from a wider pool of

investors. This can be a lucrative opportunity for existing investors to cash in on their

investment, while also giving regular investors a chance to participate in the company's growth.

However, IPOs are complex undertakings. Companies must decide whether listing their shares

on a public exchange is the right move. While going public offers advantages like increased

visibility and a chance to gauge public perception, it's a time-consuming process with strict

timelines. Companies need to be prepared for the intense scrutiny that comes with being a public

entity.

Careful planning is crucial for a successful IPO. Management must ensure they have the

resources needed to meet tight deadlines and avoid costly delays. The journey to an IPO can be

broken down into two main stages: pre-IPO planning and the actual offering itself.

During pre-IPO planning, the company undergoes a rigorous evaluation. Its business plan,

growth potential, and management team are all carefully assessed. The company may also

strengthen internal controls, improve operational efficiency, and address any potential issues that

could derail the listing process.

 Advantages and Disadvantages of an IPO

Advantages

 Access to capital

 Inclusion Into FTSE Index

 No Constrains of Cash Resource

 Corporate Image Enhanced

 Increased Liquidity of Capital Investment

 Improved Corporate Governance

 Visibility and Awareness

Disadvantages

 Dilution Of Control of existing shareholders and Promoters

 Greater Disclosure of Information

 Listing cost

 Additional Responsibilities of Director

 Management Time
 The IPO Process

An IPO unfolds in two stages: a preliminary phase for internal preparation and a public phase

where the company offers shares to investors.

Fig 6: IPO process of both private and public phase

Private phase

Finding the Right Guide: Choosing an IPO Sponsor

Companies going public need to appoint a sponsor to lead their listing journey. This sponsor acts

as the captain of the team, coordinating all the professional advisors involved. Choosing a

sponsor often involves a series of interviews, similar to a beauty pageant. Companies assess

potential sponsors' expertise, experience, and fees, while also gauging their compatibility for a

long-term working relationship.

It's a two-way street. Just as companies interview sponsors, sponsors also need to thoroughly

understand a company's business before committing to the listing process. The sponsor has
 important responsibilities towards both the company and the UK Listing Authority (UKLA). For

instance, they must confirm the company meets key listing rules and ensure the IPO wouldn't

harm investors' interests.

Appointment of other professional advisers: - The sponsor isn't the only expert a company

needs for an IPO. They need to build a team of advisors to navigate the listing process. This team

typically includes:

 Bookrunners: These financial institutions manage the selling of shares to investors during the

IPO.

 Lawyers: Two separate legal teams are involved. One advises the company, while the other

represents the sponsor and bookrunners.

 Accountants: They ensure the company's financial records are accurate and meet regulatory

requirements.

 Financial PR advisors: These specialists help shape the company's public image and manage

communications during the IPO.

 Other advisors: Depending on specific needs, the company might also involve remuneration

consultants (advising on executive compensation), registrars (managing shareholder records),

financial printers (creating IPO documents), valuation experts, or industry consultants.

IPO timetable: While an IPO can typically be completed within 3 to 4 months (15-20 weeks),

the exact timeframe can vary. Several factors influence the timeline, including overall market

conditions and the complexity of the specific offering.

Kick-off meeting: - The IPO process typically starts with a kick-off meeting, usually held face-

to-face. This meeting ensures everyone involved (the working group) is on the same page. Key
 topics of discussion include the overall structure of the IPO transaction, the step-by-step process,

the expected timeline, and any other important details. The sponsor often prepares a

comprehensive guide (organization book) that dives deeper into these areas.

Weekly meetings: - To keep the IPO process moving smoothly, the sponsor typically schedules

weekly meetings or conference calls. These sessions allow everyone involved to stay informed

about progress, raise any critical issues that need attention, and ensure the timeline stays on

track.

The Prospectus: A Hurdle and a Sales Pitch

Before a company can list on the stock exchange, the sponsor needs to get its prospectus

approved by the UK Listing Authority (UKLA). This document serves two key purposes:

 Legal Compliance: The prospectus is a legal document that outlines the company's financial

situation, risks, and future plans. It's drafted primarily by the company's lawyers, with input from

the sponsor and bookrunners to ensure it complies with regulations.

 Marketing Tool: Beyond legal requirements, the prospectus also acts as a marketing tool to

attract investors. It highlights the company's strengths, growth strategies, and market

opportunities. Specific requirements for what the prospectus must cover, including risk factors,

can be found elsewhere (page 31).

The UKLA Review Process

The sponsor is responsible for submitting drafts of the prospectus to the UKLA for review. The

UKLA has 10 business days to provide feedback (comments) on the initial draft. The company

and its advisors then revise the document based on this feedback. This process of submission,

review, and revision continues until the UKLA is satisfied. Subsequent drafts get reviewed by

the UKLA within 5 business days.

 Timeline and Uncertainty

The exact time for UKLA approval can vary depending on the specific offering. It typically takes

around 6 to 8 weeks, with 3-4 drafts being submitted, to get preliminary approval from the

UKLA. A "Pathfinder prospectus," a less detailed version, is often used before launching the full

IPO.

Due diligence: - One crucial aspect of an IPO is due diligence. This process ensures the

information presented in the prospectus, a key document for investors, is accurate, truthful, and

complete. It also helps identify any potential issues with the company.

While each advisor involved in the IPO plays a specific role in due diligence, the sponsor and

bookrunner take the lead in scrutinizing various aspects of the company. This includes its

operations, management team, financial health (past and future projections), competitive

landscape, and overall business strategy. Advisors also delve into factors like a company's

supplier relationships, customer base, outstanding debts, and anything else that could impact the

IPO's success, the company's viability as a public entity, and the accuracy of the prospectus.

Financial Due Diligence: Digging Deeper

Financial due diligence specifically focuses on verifying the company's past financial

performance and gaining a clear understanding of its future financial outlook and operational

health. Key areas examined include:

 Audited financial statements (both historical and interim)

 The company's capital structure (debt and equity makeup)

 Breakdown of historical financial results by different business segments

 A detailed review of the company's budgets

 Meetings with the company's auditors

 Comparing budgeted figures with actual financial results

 Understanding the company's accounting policies and any communication from auditors

(management letters)

 How the company plans to use the funds raised from the IPO

 The strength of the company's financial controls

 Working capital needs

 Any debt covenants that could restrict the company's actions

Legal restructuring, documentation, and agreements: Once the prospectus is approved, the

company's management team, sponsor, and lawyers collaborate to create essential legal

documents and potentially restructure the company as needed. These documents serve to assure

investors and regulators that the IPO process has been thoroughly examined for any

inconsistencies, inaccuracies, or misleading information.

Some key documents involved include:

 Placing Agreement (if applicable): This agreement outlines the terms under which investors

purchase shares during the IPO, relevant if the company is raising capital.

 Comfort Letters: These are statements from various professionals involved in the IPO,

expressing their belief that the prospectus is accurate and complete.

 Legal Opinions: Lawyers provide formal opinions on the legality of the IPO process and the

company's compliance with regulations.

 Lock-Up Agreements: These agreements restrict existing shareholders from selling their shares

for a certain period after the IPO, promoting stability in the newly public company's stock price.
Continue to prepare a company to become a public company: - The sponsor or bookrunners

play a pivotal role in guiding the company through various critical aspects of its transition to a

publicly traded entity. These include:

- Engaging in discussions regarding the company's valuation.

- Collaborating on the development of the investment case.

- Advising on the composition of the board of directors and its committees.

- Providing insights on internal control mechanisms.

- Analyzing prevailing market conditions.

Their expertise and guidance are instrumental in ensuring a smooth and successful

transformation into a public company, addressing key considerations essential for investor

confidence and regulatory compliance.

Marketing strategy: - To target certain investors, the bookrunner(s) and sponsor will draw up

an extensive marketing campaign.

Analyst presentation: Prior to an IPO, it is customary for senior management to engage in

meetings with research analysts employed by the bookrunner(s). These meetings serve as

opportunities for the analysts to gather insights and information about the company, enabling

them to produce pre-deal research reports before the commencement of the roadshow.

To adequately prepare for these presentations, senior management often conducts multiple

meetings and rehearsals. While material information is disclosed in the prospectus, additional

detailed information is typically shared with analysts to ensure a comprehensive understanding

of the company's business and industry sector.

This practice facilitates transparency and provides analysts with the necessary information to

accurately assess the company's potential and convey insights to potential investors.

Fig 7: Adviser’s role and responsibilities

Public phase

The primary elements of the marketing process are delineated below and expounded upon in the

forthcoming chapter titled "Generating and Capturing Investor Demand During an IPO."

Announcement of Intention to Float (‘AITF’): - An announcement to the public known as the

AITF is where a company first gives explicit confirmation of its plans for an initial public

offering (IPO). The marketing effort now starts to pick up steam, sometimes with the release of
studies by analysts associated with the bookrunner(s). Greater firms are probably running a well-

planned media relations strategy to increase public awareness of their operations and leadership.

Pathfinder prospectus: - During this phase of the procedure, potential investors are frequently

provided with a draft prospectus, which is also known as a Pathfinder prospectus. This document

represents the prospectus's nearly final draft. It should contain all pertinent information, with the

exception of the size of the IPO and the subscription price of the new shares to be issued, which

are unlikely to be completed at this time.

Investor education: - The process of giving people the information and tools they need to make

wise investing decisions is known as investor education. It include imparting knowledge on

investment goods, risk management, financial markets, and goal-achieving techniques. There are

many other ways to educate investors, such as through seminars, workshops, online courses,

instructional materials, and one-on-one advice from financial experts. Its ultimate purpose is to

provide investors the confidence and responsibility to appropriately navigate the complexity of

the financial world.

The management roadshow:- It consists of many gatherings with possible investors. A formal

presentation detailing the company's business operations, financial results, performance, markets,

goods, and services is usually included, given by the CEO and CFO. Similar to the analyst

presentation, the sponsor/bookrunner(s) in this workstream are responsible for arranging

rehearsals and helping a firm prepare for the presentation.

Completion and pricing meeting:- All pertinent documents and paperwork are evaluated in

their final form by the directors and their advisors during a completion meeting that follows the

management roadshow and the IPO price. Three business days following price, new shares are
normally exchanged for cash. The shares may trade on a "when issued" basis during these three

days, which means that deals are not finalized until the listing takes effect.

Impact Day: - The prospectus will be made available and the listing will be formally notified to

the market on this day, which usually comes after the completion meeting. UKLA final approval:

In order to receive final approval from the UKLA, the prospectus must be presented in its final

form, including with all pertinent price and size details. In accordance with the UKLA, all

supporting documentation, such as directors' service agreements, audited financial statements,

and any reports included in the prospectus, must be submitted before the date of approval.

The prospectus is only approved by the UKLA on the day it is dated and released. Listing and

trading application forms The UKLA receives the formal application for a listing at least 48

hours prior to admission. A formal application for entry to trade is also filed to the Exchange at

the same time.

Admission: -The shares of a corporation are now "admitted" to listing and are available for

public trading on the Main Market. In addition to the London Stock Exchange granting trading

permission, the UKLA formally grants the listing.

Specialist companies: Specific rules govern various types of businesses, including investment

companies, resource companies, and specific financial entities. These regulations may necessitate

expert reports, for instance, to assess oil and gas reserves. In certain situations, companies might

be eligible for an IPO even if they do not meet the standard three-year financial statement rule,

particularly when pursuing a Standard Listing. It is advisable to proactively discuss the listing

requirements with both the sponsor and the London Stock Exchange or the UKLA to ensure

compliance and a smooth listing process.

 ADDITION TO LSE (LONDON STOCK EXCHANGE)

The securities must be admitted to trading by a recognized Investment exchange ("RIE"), like the

Exchange, prior to the FCA granting admission to the Official List. The Main Market is the

Exchange's flagship platform, and it establishes its own requirements for trading access to its

markets and regulations governing the trading of securities. This market is categorized as

regulated, which is significant because it means that issuers whose securities are allowed to trade

on a regulated market are subject to many EU directives, including the Prospectus and

Transparency Directives.

The Exchange operates four separate segments:

Premium

These securities are subject to the strictest regulations and are included in the Official List.

Standard

Both debt and equity securities may be placed in this segment. Businesses that do so must adhere

to EU minimum standards to be listed on the Official List.

The Specialist Fund Segment ("SFS")

A specific area of the Main Market reserved for extremely specialized investment funds is called

the SFS. Refer to this guide's section 13,4,3 for more details about the SFS.

High Growth Segment ("HGS")

High growth trading companies that intend to apply for admission to the Official List eventually

but do not currently meet the necessary qualifying requirements are the target audience for the

HGS. The regime only applies to the equity shares of EEA-incorporated companies, who are
required to apply for admission to the HGS. Although the HGS is a regulated market, securities

that are permitted to trade there cannot be added to the Official List

Role of Registrar

For businesses contemplating an initial public offering, understanding the role of a share registrar

may help enigma. Put simply, the registrar's job is to keep the business's official register of

members (or shareholders) current and maintain it, all the while keeping track of the total

number of shares authorized and issued by the company daily. However, putting this seemingly

straightforward goal into action calls for much preparation and specialized labor, which is where

a competent registrant will pay off well.

The meticulous and intricate work that registrars must accomplish before an initial public

offering (IPO) cannot be done in a hurry or overnight. Therefore, you should give yourself at

least four weeks between contacting the registrar and the suggested date of the flotation,

regardless of whether you approach the registrar directly or through your consultants, which

might be a legal firm, investment bank, or another adviser. Be advised that instances requiring

higher complexity might take an extra four to six weeks. It is thus always essential to include

your registrar as early in the initial public offering (IPO) process as feasible.

To enable the shares to be electronically settled on Day One, your registrar will walk you

through the process of setting this up and making sure that all Euroclear requirements have been

met. Lock-up contracts and limitations on trading for premium listings, the lock-up period is

normally 180 days for the issuer, the shareholders selling in the IPO (and, in certain situations,

other pre-IPO shareholders), and 365 days for directors and senior managers. AIM IPOs are

usually subject to longer lock-up periods and additional "orderly market" undertakings.

Recognize the equity awards that will vest or settle during the lock-up period and the procedures

for handling them. When it comes to your reporting deadlines as a publicly traded company, be
aware of the required closed periods and how they may impact the conclusion of the lock-up

period, the payment of equity awards, and the possibility of selling pre-IPO shares on the open

market.

Fig 12: No of IPOs from 2010-2024

No of IPOs
600

500

400

300

200

100

0
UK Main Market SFM International Main AIM
Market
 CONCLUSION

For Companies Seeking Acceleration and Potential Cost Reductions:

UK Listing: The UK's streamlined process can go more swiftly because of the FCA's emphasis

on investor protection regulations. Reduced listing costs and possibly less stringent financial

predictions could be enticing. However, the investor base may be focused more in Europe.

For Companies That Prioritize Investor Protection and Domestic Appeal:

India Listing: SEBI's emphasis on thorough financial disclosures should comfort Indian investors.

Due to the large and growing pool of potential investors, a successful Indian IPO can generate a

significant amount of domestic capital while being slower and occasionally more expensive.
 REFERENCES
UK IPO Listing Process
 https://www.lse.ac.uk
 https://www.fca.org.uk/
 https://uk.practicallaw.thomsonreuters.com
 https://www.winston.com/en/insights-news/fca-announces-major-reforms-to-the-uk-
listing-rule
 https://www.cnbc.com/2024/02/14/tui-london-loses-another-listing-but-analysts-wary-of-
writing-off-uk.html
INDIA IPO Listing Process
 https://www.nseindia.com/
 https://y20india.in/ipo-allotment-
status/#:~:text=Process%20of%20IPO%20Allotment&text=It%20is%20decided%20by%
20the,period%20while%20funding%20the%20company.
 https://www.indiainfoline.com/knowledge-center/ipo/what-is-ipo-allotment-process