The public offering and admission to trading

IPO or direct listing

Not every listing involves raising capital. In a direct listing, existing shares are admitted to trading without a prior sale offering; the price is formed directly on the market from buy and sell orders. This route can make sense for companies that already have a broad shareholder base and are mainly seeking liquidity and visibility.

Pricing and bookbuilding

The price is the most sensitive decision in the offering. A price that is too high can lead to undersubscription and a falling share price after listing; one that is too low means existing shareholders give up part of the company below fair value. Valuation starts from methods such as discounted cash flows and comparison with similar companies, and is then tested in dialogue with investors.

1. Preliminary valuationThe intermediary and the advisers estimate a value range based on the financial data and comparables.
2. Testing interestBefore launch, the company is presented to some investors, within the limits allowed by the regulations, to gauge interest.
3. Setting the price rangeThe offering is launched with a fixed price or a range (for example, between MDL 22 and MDL 28 per share).
4. Building the order bookInvestors submit orders stating the number of shares and the maximum price they will accept.
5. Setting the final priceBased on the recorded demand, the issuer and the intermediary set the final offer price.

Subscription and allocation

During the subscription period, investors submit orders through the offering's intermediary or through other authorized participants, under the terms of the prospectus. At closing, total demand is compared with the number of shares offered. If demand is lower, the offering may be reduced or, if the prospectus sets a minimum threshold that was not reached, cancelled. If demand exceeds the offering, the announced allocation rules apply, for example pro rata allocation or splitting into tranches for retail and institutional investors.

Admission and the first day of trading

After the offering settles, meaning the money is transferred to the issuer and the shares are registered in investors' accounts, the company obtains admission to trading under the exchange rules. The admission requirements and documents needed for BIMx are presented in "Regulations and legal acts" and on the "Listing process" page.

• The first day marks the shift from the offer price to a price formed freely on the market from buy and sell orders.
• The price may rise or fall relative to the offer price; a moderate, steady performance is often healthier than a spectacular jump.
• Liquidity depends on the number of shares in free circulation (free float) and the diversity of investors.
• Existing shareholders may be subject to lock-up commitments (lock-up) for a set period, if these were given in the offering.