Some IPO pricing is not fair/removal of financing by halting offerings

According to Tejarat News, in the past months, a number of Initial supply It was done in the stock market and over the counter. CEO OTC In a conversation with TejaratNews, he explained the reason for these offerings and the IPO Calendar experience.

Meisham Fadaei, the CEO of Farabours, said about the experts’ criticism of the process of IPOs in OExpress: The discussion of IPOs goes back to the first half of 2019. In this way, due to the special conditions of the capital market, a significant amount of companies sent numerous requests for supply and acceptance to the stock market and over-the-counter.

Pointing out that in July 2019, with the approval of the Stock Exchange Organization, the responsibility of accepting companies was transferred to the stock exchanges, which doubled the capacity of acceptances, he said: In this era, due to the profitability of the market, there are numerous acceptance requests for the initial offering on a daily basis. It was sent to the admission board of the exchange. To the extent that this board held two meetings a week in 2019, and in each meeting, it examined the conditions of two companies. Almost 80% of these companies that met the requirements of the guidelines were accepted that year.

What was the reason for accelerating the initial launch process?

Referring to the three-step process of acceptance, symbol insertion and offering for a company’s entry into the capital market, the CEO of Farbours said: After acceptance, the publisher has six months to insert and four months to complete the administrative processes. After that, in a period of about two to six months, the stock must be offered. Of course, during the Corona period, this deadline was extended by two months by the stock exchange organization. The board of directors of the exchange also had the possibility to add another two months to this period of time.

Emphasizing that if the IPO is not done before the end of all these deadlines, the acceptance of the company will be canceled. In a way, the publisher has to go through this process again from the beginning.

According to him, it was based on this issue that the OSE of the companies admitted in 2019 and early 2010 to prevent the cancellation of admission before the end of all legal deadlines in the market. Initial supply did

He pointed to the upward and positive conditions of the market in the first two months of the year and said: Accordingly, according to the predictions made regarding the positive trend of the market, we tried to make the initial supply during the good period of the market.

Fadaei considered financing as one of the key and important goals of the capital market and said: Stopping the initial supply means that part of the financing will be removed from the capital market.

Experience IPO Calendar

Pointing out that in order to improve the conditions of IPOs, IPO Calendar was introduced by the CEO of Farabourse, and said: According to this plan, the IPOs would be announced a month ahead of time in order to make the market more ready to participate and buy shares.

Fadaei considered the experience of initial releases with previous notifications to be successful and said: The market had a better reaction to the releases that were made according to this plan, compared to the previous releases such as Shahrivar 1400 IPOs. Of course, with this plan, the speed of initial deliveries was also reduced. As far as before in Shahrivar 1400, the exchange had six offers and four opening of the symbol, and the stock exchange had three initial offers.

Emphasizing that the capital market has always been against mandatory pricing, he said: Accordingly, in practice, we must show this opposition in correct valuations and discovering transparent prices.

According to the CEO of the exchange, when an IPO share grows by 200%. It indicates that the initial pricing was either not fair or the buyer participation was not correct.

The continuation of this conversation and the reason for the initial offering of startups will be published in the second part and in the coming days.