In the course of your company’s growth continuum, you may be faced with situations whereby you need to decide to scale, expand or diversify. It only makes business sense to scale or diversify to increase the profitability of your company by making its products popular amongst the general public. What could be better than to do the same while increasing your company’s visibility & market image amongst the general public, investors, corporate analysts, and market stakeholders.
The way to do this is through listing. By listing your company on the Pakistan Stock Exchange (PSX), you are not only raising capital for your company in order to expand, scale, or diversify your product range, but you are also creating a positive image of your company. This positive image is one which commands respect and admiration amongst the stakeholders of the Capital Market, the investors (local and foreign), and the general public.
By listing your company on the stock market, you are raising capital without having to go the route of taking a bank loan or raising private equity. Paying for a bank loan can be quite costly and getting private equity means diluting your shareholding in your company. Therefore, raising capital by floating 12.5% shares of your company in an Initial Public Offering and (at least) 25% shares in the subsequent four years to the end investor will bring in necessary funds for your company. You can then go the way of scaling, expanding, or diversifying your company and its product range.
Listing has many advantages for your company, not just the basic advantage of raising capital. Through listing, your company attracts the attention of investors, local as well as foreign. By listing on Pakistan Stock Exchange, you get a chance to be included in the top companies such as the KSE 100 Index. This will bring about exposure of your company to local and foreign investors who will take interest in your company’s growth story and will want to be a part of it through shareholding.
By way of listing, your company also gets its books organized and transparent, thus making your company’s financial activities and operations more streamlined and lawful. This will also help your company in organizing or laying the roadmap for succession of leadership for the next generation. Whereas before listing it may just be a family concern managed by the head of the family, with no clear pathway laid out for successful transfer of leadership powers to the next generation.
To sum it up, listing is a long term, low cost solution to raising capital where there is no time bound or financing-cost limitations to the funds raised while propagating a positive and transparent brand image of your company. It is the right way forward for your company to grow, expand and diversify.