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Notice issued by the Exchange to all Listed Companies & Issuer of listed securities KSE/N-920 dated February 21, 2013Preview
1. What is the capital eligibility criteria for main board listing?
Answer: A Minimum post issue paid-up capital of Rs.200 million is required to list on the main board.
2. What is the capital eligibility criteria for GEM board listing?
Answer: Minimum post issue paid-up capital of Rs.25 million is required to list on the GEM board.
3. How much capital should be raised on an IPO?
Answer: This depends on the amount of funds the company needs to raise and, the interest of the investors. The company must be able to justify their specific need for capital to investors. Management must also carefully consider the degree of control they wish to retain. When a company goes public, a reasonable percentage of the shares must be publicly owned and have a minimum market value of PKR 200,000,000 for Pakistan Stock Exchange.
4. What is the business requirement for main board listing?
Answer: The following are the business requirements for main board listing:
1. The Issuer shall have been in operations for at least 3 financial years;
2. The issuer has profitable track record for at least 2 preceding financial years from its core business activities
3. Not less than 51% of the shares of the issuer are held by the same persons for at least 2 preceding financial years;
4. Its book value per share is not less than its face value per share;
5. Why companies seek listing on PSX instead of simply borrowing funds from financial institutions?
Conventional sources of financing include raising capital from existing shareholders and borrowing from financial institutions to which companies have to pay interest, even if they face business loss. Because PSX-listed companies source their capital funding directly from the shareholding public, these shareholders receive returns on their investment as dividends only when firms are profitable. Whenever listed companies need to raise capital for expansion, they are able to issue additional shares and offer them to the public.
6. Who sets the initial share price?
Answer: The company mutually agrees on an initial floor price, by agreement with the broker/investment dealer. However, consideration to the marketplace is the main factor.
7. How is a trading symbol assigned?
Answer: You can request specific trading symbols and we will try to accommodate your choices. If none of the preferred symbols are available, Pakistan Stock Exchange will request a symbol from NCCPL. Symbols previously used by other issuers cannot be reassigned.
8. Is there a tax benefit Is there a tax benefit in Main Board/GEM Board listing?
Answer: Yes, the government also supports and promotes the decision of an organization to list, giving tax benefits (20% tax payable reduction for the first year after listing and 10% tax payable reduction for further two years after listing). These benefits directly impact your bottom line and improve earnings.
9. How do I select a consultant?
Answer: You can select any consultant who has been given a license by SECP.
10. Do I have to give up control of my company to go public?
Answer: No. Many companies structure their offerings so that after the initial offering, the owner(s) still have control. If the shares held by the public are widely distributed, management may maintain effective control, even when it owns less than 50 percent of the shares. If more than 50 percent of a company’s shares are sold to just a few outside individuals, the original owners could lose control of the company.
11. Is the PSX listing process complicated?
Answer: The listing process is not really complicated. A company wishing to apply will be provided with a list of financial advisors who can assist with its preparations.
1. Your Company appoints a “Consultant” and completes submission of all documents
2. Initial review of your Company and necessary due diligence to ensure compliance with the PSX regulations for listing.
3. On behalf of the Exchange, the PSX Listing Committee approves the application.;
4. After the Exchange’s approval, the application is forwarded to SECP for its approval
5. Public offer through fixed price method or book building
6. Your Company is formally listed
12. What is a prospectus?
Answer: It is an official document prepared by the consultant for the potential investors which contains Risk factor, floor price, and the necessary information requires by the investors.
13. Can I exit the market once I list?
Answer: Yes, you can buy back the shares of your company; and in the case of GEM Board, you can migrate to main board.
All companies publicly listed and funded by the general public have the key responsibility of educating and guiding all their shareholders about the company’s past financial performance, challenges, upcoming expansions, future growth outlook etc. This helps active investors in gauging whether or not to invest in your company’s future, as hearing directly from the company is an unmatched source.
PSX constantly endeavor to facilitate this requirement and offer to not only assist you in getting the relevant audience, but also offers PSX premises to facilitate the event. PSX’s team assists in the entire process to maximize Corporate Briefing Program’s productivity. Holding these briefings also qualifies our corporate members for PSX’s prestigious Top Company Awards.
‘Investors both locally and abroad want to hear about the success achieved by businesses in Pakistan, and we strive to make that happen!’
PSX offers all its listed companies an avenue to disseminate all information vital to the public at a national and international level. These services are extended to your corporate analyst briefings, important public disclosures and any other market sensitive information.
The initiative seeks to educate your company personnel on the process of defining their investment objectives, what to expect from the stock market, do’s & don’ts of investing, and how and where to begin when buying stocks. PSX offers to conduct these financial literacy programs at your location as well as offer our own premises free of cost. Our team of professional speakers are trained to introduce the knowledge of your employees in a smooth and effective way.
Beginning a company’s journey towards an IPO is a daunting task requiring efforts on all fronts to maximize the proceeds from a public offering. Keeping the marketing challenges for IPO’s in mind, PSX has created a customized proposition for each Equity based IPO client to introduce the company to the general investment community – including preparing a documentary from concept to execution consisting of short videos, preparing and implementing the digital media plan and ensuring reach of the message. The digital execution and message will have the ability to engage audiences and has to be immediately shared onwards which can increase the reach of the campaign and message multifold.
The documentary may include an interview with the CEO on his vision and mission, brief introductions of key management personnel, tour of the factory or facility, CSR and SDG initiatives, and any other areas highlighting the company’s worth and profile. The documentary will then be pushed online to the relevant audience, to gain traction and boost the company’s offering. The proposal mentioned is linked to one of our media partner Vcast, but companies may choose to engage with a different partner offering similar services, according to individual requirements.
‘In the new digital age, PSX ensures its listing contenders get the projection they deserve to lay the foundation of a successful IPO’
Pakistan Stock Exchange has partnered up with stakeholders to provide value added services for the listed companies on PSX. Training, awareness sessions and webinars among others are being offered to benefit various aspects of your businesses.