Approaching the listing process

Fabio Brigante, Head of Origination Mid&Small Caps, Primary Markets - Italy

Over 50% of listed companies are small caps. Does a successful IPO extend beyond company size?

There are various parameters to be assessed in a listing process. A company’s size is certainly one of them, but it alone cannot determine success, much less pose an obstacle to the listing process. In recent years we have seen many companies with very limited turnover successfully reach the market, and they did it by convincing Italian and international investors thanks to their growth prospects, by presenting solid, sustainable projects accompanied by clear strategies, and above all through support from management teams capable of making these strategies a reality.

At Borsa Italiana we have long believed in a diversified market structure that is also capable of meeting the needs of small and medium enterprises. There have been transactions that have raised very small amounts of capital, but that have enabled the companies in question to achieve strategic objectives within their sectors of operation.

The listing process is a sharp discontinuity in a company’s history. This is true in terms of both pre- and post-listing obligations, but also, and above all, of the resulting opportunities. Companies will immediately begin to use a self-assessment model to investigate not only the gaps to be filled in terms of the requirements set in the rules for the chosen market, but above all the gaps that need to be filled to make the company more attractive in the eyes of investors. With support from a team of advisors, an in-depth look will be taken at the management control system and budgeting system, the governance structure will be evaluated, an attempt will be made to determine the right company profile to bring to the market and discussions will be held with the managers to understand how able they are to be ready to overcome the challenges posed by the market. The company will emerge from the listing process better prepared not just for the stock market but also for its own market.

It is very important to start in time, it is fundamental that we make you aware of what undertaking a listing process and being a listed company entail. This is why we will seek to help you with all decision-making phases relating to an IPO process and aid you in achieving your goal.

We have identified various steps that we suggest you take. For those who are now beginning to consider a listing on the exchange, we have created the IPO Master Class, which is an online training process that helps entrepreneurs overcome their initial concerns regarding the listing process: we will look at subjects ranging from opportunities relating to raising capital to market structure, the IPO process and the obligations of listed companies.

On the other hand, if you have specific requests you would like to look at in detail, perhaps while also examining your growth prospects on our markets, we suggest that you meet with us. For those who have made it through the decision-making phase and have thus decided to begin a listing process, we suggest a pre-listing assessment, consisting of time dedicated to you during which we will examine issues relating to the IPO process, perhaps ranging from management systems to planning and control, the business plan, governance structure and formulation of an equity story. Time during which we will assess the gaps that you need to fill to achieve your objective.