Public offering is one of the most important steps in a company's path to growth and sustainability. The decision of the owners of the company to make the company public by offering its shares to the public constitutes the beginning of this process. The process of going public is not only a financial turnaround, but also an important opportunity to strengthen the corporate structure of the company and increase its effectiveness in the market.
When making the decision to go public, company shareholders should evaluate in detail the various benefits that this process will bring to their companies. This evaluation ensures that the most accurate and strategic decision is taken. The main advantages of public listing of companies can be listed below:
1. Providing Financing
IPOs provide companies with an alternative and low-cost source of financing. By offering their shares to the public, companies can create a large capital source and use this source for investments, growth and development. The financing provided by the public offering is an important step for companies to realise their projects and sustainably expand their operations.
2. Providing Liquidity
Being a public company allows its owners to sell their shares at any time. This provides significant liquidity to the company's shareholders. At the same time, when the company's shares are traded on the stock exchange, investors have more flexibility to buy and sell shares. This has a direct impact on the company's market capitalisation.
3. Institutionalisation
IPOs accelerate the institutionalisation process of companies. The decision to go public enables the company to adopt a more professional management approach. During this period, developments occur in areas such as the company's governance structure, financial reporting and internal audit. Thus, the company's governance processes become more transparent and streamlined.
4. Domestic and International Publicity
IPOs increase a company's recognition at home and abroad. A company traded on the stock exchange receives more media coverage, which increases the brand's visibility. It also becomes an attractive investment instrument for investors abroad. Through the IPO, the company can reach a wider customer base in the global market.
5. Increased Credibility
IPO increases the credibility of the company significantly. As listed companies are subject to more audits and regulations, their credibility increases. Investors find it more secure to invest in publicly traded companies. This facilitates the company's access to financial resources and accelerates the process of obtaining credit.
6. Globalisation
IPOs allow companies to be more effective in global markets. When companies go public, they have the opportunity to do business with not only local but also international investors. This enables the company to take an important step towards globalisation. Expansion into the global market supports the company's growth and sustainability objectives.
7. Secondary Public Offering Opportunity
An initial public offering is also the basis for companies to make secondary public offerings in the future. If a company's initial public offering is successful, it may be able to raise further financing through a follow-on public offering in the future. This gives the company the opportunity for further growth and allows it to increase its market share.
IPO is an important process that improves the financial and corporate structure of a company. By going public, companies can both obtain financial resources and improve their corporate identity. An IPO not only contributes to the growth and globalisation of the company, but also creates valuable opportunities for investors. Therefore, it is of utmost importance for companies to properly manage and strategically evaluate the IPO process.