The Philippine Stock Exchange, Inc. (PSE) expects more companies to consider raising capital through an initial public offering (IPO). This, after it released its Amended Listing Rules, which contains relaxed profitability and operating history requirements and a temporary relief clause in considering applications due to the pandemic.
“The Philippine stock market lags behind when it comes to the number of companies going public. To address this issue, we relaxed certain requirements for listing in both the Main and SME Boards and we introduced a measure that will gauge a company’s suitability for listing despite the challenges it is facing due to the pandemic,” said PSE President and CEO Ramon S. Monzon. “We are thankful to the Securities and Exchange Commission (SEC) for acknowledging our recommendations to ease some of our listing criteria. With this, we hope to attract more companies to dip their foot in the water and consider the stock market as their preferred avenue for capital raising.”
To formally apprise key IPO stakeholders about the Amended Listing Rules, the PSE will hold a two-part roundtable discussion this April entitled, “The Road to IPO”.
On April 7, top PSE executives and its listings team will take the lead in the information session to discuss the Amended Listing Rules together with officers of investment houses, sponsors for listing applicants in the Small, Medium, Emerging (SME) Board, and other key members of IPO deal teams.
Aside from the easing of the track record and operating history requirements and the COVID-relief clauses, the Amended Listing Rules now contain Sponsor Model provisions for listing applicant companies in the SME Board.
Under the Sponsor Model, the applicant’s suitability for listing will be evaluated in the first instance by a listing sponsor accredited by the Exchange and if the applicant meets the suitability for listing criteria, after thorough assessment of its financial condition, business viability, future prospects and management track record among others, listing sponsor shall endorse the listing application to the PSE.
“The sponsor model has been practiced in other bourses and we see the merit of adopting this in the PSE. This listing format will be beneficial to SMEs and start up companies that have very good profitability and expansion potential but could not tap the stock market for funding because they do not qualify to list based on the set criteria,” explained Mr. Monzon.
The second roundtable discussion, set on April 27, will feature top executives of listed companies who will share their successful PSE IPO journey to potential listing applicants. This event aims to provide learnings and insights on the process of going public from the perspective of the issuer.
“Going public is a once in a lifetime event for many companies. It is important for business owners to know firsthand what it takes to go public from those who have been through the IPO route. Companies who are considering listing will find a lot of value in attending this roundtable discussion,” Mr. Monzon added.
Companies interested in joining the Road to IPO roundtable discussions may contact PSE’s Marketing Services Department through email@example.com for more information.