To encourage capital formation through the Initial Public Offering (IPO) market and improve the effectiveness and efficiency of the overall public offering process, the Securities and Exchange Commission of Pakistan (SECP) has launched a number of new initiatives.
In this context, a document on IPOs has been completed by the SECP. The Initial Public Offering (IPO) is the first time that a publicly traded, the unlisted firm sells securities to the general public, as the SECP informed the investors. It is one of the ways corporations raise money to meet their needs for funding.
The IPO’s primary goal is to raise more money to meet funding obligations. For purposes including expansion, rival acquisition, vertical integration, horizontal integration, working capital, modernization, etc., additional funding may be necessary. Additionally, it offers sponsors and venture capital funds an exit so they can recover some of their initial investments.
Additionally, IPO can aid in advancing the organizational structure’s corporate governance and transparency cultures. A supporting structure for Special Purpose Acquisition Companies has been created by the SECP (SPAC).
SPAC gives investors and the general public the opportunity to co-invest with knowledgeable, extremely experienced managers and profit from the growth in the share value of purchased units.
Despite the fact that one SPAC has been registered, no transaction has yet matured.SPAC can encourage merger and acquisition deals, resulting in synergies and advancing economic growth.
