IPO Singapore – Preparing your SME Company for an initial public offering on the Singapore Exchange Securities Trading Limited

IPO Singapore – Singapore is still a good place for IPO listing with its global investor base and global issuer base.  Many business owners have companies that have raised investment capital so need to give an exit to their investors without paying out cash or alternatively some companies need investment capital at a late stage of their growth so elect for pre-IPO investment.  Such companies will then consider where to list their companies.  The Singapore Stock Exchange (SGX) is a good market for such companies to list.

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The correct way that the capital markets are supposed to operate is that good companies list on the stock market and grow via increasing their current operating business or engage in mergers and acquisitions and buy companies to increase their consolidated net profit.

This article will set out a few key things that every aspiring IPO company in Singapore needs to consider.

#1: Business model transformation

Most traditional businesses have stable business but no more growth.  If a company owner wants to have a listed company that has a stable but rising share price, he should spend time thinking about how to grow the net profit and revenue of the business. 

A business owner would therefore need to spend time transforming his business to have both a stable business with net profit and a business with growth potential.

Most business owners just list their traditional business with a stable net profit and end up with a listed company with a flat share price.

#2: Growth of net profit

For a listed company to have a growing share price, a company needs to have a growing net profit with a growing dividend per year.  For a company with a traditional business, such a growing earning per share would encourage investors to buy the stock to hold as a good dividend play.

How to have a growing net profit, you would need to have a growth story in your business or acquire a business that is growing faster than your current business.

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#3: IPO Singapore – COVID resistant growth story

In a post pandemic period of history, most companies need to transform to have a post-pandemic resistant story for investors to consider investing money into their listed companies.  F&B business ventures need to transform to become asset light and cloud kitchen enabled such that their food can be delivered via ecommerce platforms like Grabfood and Deliveroo.

In conclusion, to prepare for listing on the SGX, one needs to  transform your business model of your company and grow your net profit to about 2 million to 3 million Singapore dollars to enable your company to reach potential listing status on the Catalist board of the SGX.

If you have any comments on our article, please leave a comment below.

https://www.SingaporeLegalPractice.com is a corporate law and commercial law education website headquartered in Singapore which aims to demystify business law and 新加坡商业法 for SME Company Owners, Startup Founders and 新加坡新移民老板。The information provided on this website does not constitute legal advice. Please go to our contact us page and contact us and we will arrange for a lawyer to speak to you.  Please obtain specific legal advice from a lawyer before taking any legal action.  Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk.

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