Sales Methods

In initial public offerings, companies generally prefer two main methods to offer their shares to investors: Solicitation Method and Sale Method. Both methods offer different strategies during the IPO process and are shaped in accordance with investor demands.

1. Demand Collection Method

The demand collection method is based on the collection of requests from investors for the shares offered for sale and the evaluation of these requests in line with certain criteria. This method can be applied in different ways, including  fixed price demand collection,  demand collection through price bidding  and  demand collection through price range  demand collection through price range  

1.a. Demand Collection with Fixed Price

In this method, the shares offered for sale are offered to investors at a fixed price specified in the public offering announcement. Investors submit their requests by depositing the amount corresponding to the amount of shares they wish to purchase into the relevant bank account. After that, they apply to the intermediary institution or institutions managing the public offering and fill in and sign the request form.

• Flexibility: Investors can set a lower limit on the amount of shares they want to buy in the request form.
• Simplicity: This method offers a simpler and more understandable process for investors because the price is fixed.

1.b. Demand Collection through Quotation

In this method, the public offering company or the existing shareholders determine a minimum sales price. Investors submit their bids provided that they are above this base price.

• Competition: A competitive environment is created between investors through price offers.
• Flexibility: The company can take the most appropriate distribution decision in line with the incoming price offers.

1.c. Demand Collection through Price Range

If a price range is specified in the public offering announcement, the price range method is applied. In this method, the difference between the floor price and the ceiling price usually does not exceed 20% of the floor price.

• Dynamic Pricing: Investors' demands are evaluated in this price range and transactions are made at the most appropriate price level.
• Flexibility: It offers a wider room for manoeuvre on price for both investors and the issuer.

Solicitation period:
Solicitation starts on the second business day at the earliest following the publication of the public offering announcement (circular). This period can be determined as minimum 2 working days and maximum 30 days.

2. Sales Method in the Stock Exchange

Sale on Exchange is implemented with the approval of the Capital Markets Board (CMB) and in accordance with the relevant regulations of Borsa Istanbul. In the public offering carried out by this method, the sale of shares is made in the primary market and investors purchase shares directly from the stock exchange platform. The public offering shall be carried out in accordance with the specified circulation period.

Different models can be applied in the method of sales on the stock exchange:

2.a. Sürecurring Müzayede Yöntem

This method allows the publicly offered shares to be traded on Borsa Istanbul's continuous auction platform. Demand and supply are compared in real time and transactions are executed.

2.b. Fixed Price Demand Collection and Sales

The fixed price method involves selling at a predetermined price as in the demand collection process. Investors submit their requests at the previously announced fixed price.

2.c. Demand Collection and Sales at Variable Prices

The floating price method allows investors to communicate their price offers. In this process, the selling price is determined according to the intensity of demand.

• Price Optimisation: The best price level is achieved depending on market conditions.
• Investor Participation: Provides the opportunity to reach a wider investor base.

Both methods ensure that the IPO process is carried out efficiently and can be tailored to the different needs of companies and investors. While the demand collection method offers a more flexible and controllable process, the sale method on the stock exchange creates a mechanism that directly adapts to market dynamics. The method preferred by companies depends on the structure of the shares to be offered, the targeted investor group and market conditions.