Top 5 Things to Know Before Choosing an SME IPO Consultant

Selecting a SME IPO consultant becomes one of the biggest decisions that an owner of a small or medium size business will take during its process of going public in India. The IPO market in SME is complicated, highly regulated and full of both wait and danger. An experienced advisor can be the key to an easy, successful listing and a painful, expensive task. The following are the five most important things a business owner must consider before making decisions on whether to choose an SME IPO consultant and this is important to your business going forward.

1. Experience and Track Record: The Force of Past Success

The experience and track record is the first thing that should be checked in SME IPO consultant. Although there are lots of consultants in business, none of them have a firm background in taking businesses like yours and guiding it from initial stages of the IPO process to complete financing. Inquire as to what are instances of successful SME IPOs which they have handled and particularly in your industry. Check their list of clients and ask to see some case studies, and do not be afraid to ask the lawyer to provide you with references whom you can call directly.

An experienced consultant will know how SMEs have different issues; lack of resources, erratic finances, and how to achieve both growth and compliance. They will be able to know how to foresee the obstacles of regulation, how to prepare you about due diligence research, and how to orient your company in the light that will be appealing to investors. The fact that they have succeeded in the past is a good pointer in the fact that they can deliver to you.

To be checked:

?The number of IPOs dealing with SMEs Number of SME IPOs handled

?Industry and firm size collaborated with

?References and testimonial of clients

?The description of any IPOs with financial or regulatory issues and, any resolution of such problems

2. In-depth Service Delivery: Not All Paperwork

The SME IPO process is not all about completing the forms or submission of word papers. It is a process involving several stages, which comprehend the determination of eligibility, restructuring of the financial aspects, regulatory ownership, documentation, evaluation, advertisement, investor connection, and support after listing. The finest consultants have an end-to-end approach providing services as a project manager and privileged counselor.

A full-fledged consultant will assist you:

?Find out your qualification and preparedness of an IPO

?Format or Restate financial statements in accordance to SEBI and exchange procedures

?Write, and file the DRHP (Draft Red Herring Prospectus)

?Liaise with merchant bankers, registrars, legal advisers and auditors

?Plan marketing campaigns and roadshows to investors

?Control the relationships with SEBI, BSE SME, or NSE Emerge

?Offer post listing compliance, reporting and investor relations services

This one-stop solution saves your time, minimizes the chances of miscalculations and keeps your IPO on the course. It is also useful in that you will have a communication channel to all your concerns which is indispensable in a complicated procedure.

3. Regulative Accreditation and Transparency: Dare No Compromises

When your company is out to be an IPO, making sure that you technically comply with the regulations is not an option-it is the basis of your business reputation and will be what makes or breaks the actual listing. Always remember to check whether your consultant is listed in SEBI and acknowledged by the concerned stock exchanges. Such accreditation on their part is your guarantee that they are familiar with the most recent rules and best standards.

It is also imperative that transparency occurs. Make sure you ask them to provide the fee structure in a clear tabular format before you sign any contract. Specify what is part of their service, what can be subjected to additional costs, and how remunerations are planned. Wary of those consultants that advertise or show interest in giving you a guaranteed result or those that are very hesitant when it comes to speaking of the costs. It can also cost less in the long-term to ensure that you pay a little more to use a legitimate, open and transparent consultant with a good track record of getting things done in an efficient manner rather than to run afoul with the regulators and incur a penalty or even costly delays.

Checklist:

?SEBI number The SEBI number of the registered company.

?BSE SME/NSE emerge clearance

?Fee proposal that is detailed and in writing

?Certainty on deliverables and time scale

4. Good Network and Market Access: Getting Doors Open to Your IPO

The network of a consultant is one of the black assets that can contribute much to the success of your IPO. The ones having network with merchant bankers, underwriters, legal consultants, auditors and more importantly a large pool of institutional and retail investors will obviously be able to obtain superior prices, provide higher subscription quotients and create more noise in the market.

Being well connected, a consultant can:

?Give you known merchant bankers and legal counsel Introduce you to known merchant bankers and legal counsel

?They will help you secured anchor investors or institutional buyers

?Host good investor roadshows and presentations

?Utilise the media and online channels to increase the exposure of your IPO

They can also assist you in timing your IPO to achieve the best results, get an idea on the expectations of investors, and also deal with market volatility. The connections can make the world of difference in a process where timing and being in the right place at the right time are important.

5. The Long-term Partnership: Post-Listing Day Support and Services

Most entrepreneurs take the launch of an IPO so seriously that they forget what happens after. However, it is equally as vital to the reputation and stability of the share price of your company that you stay compliant, maintain investor relations, and continue reporting even after the listing. Select consultant with strong post IPO service including:

?Quarterly and annual reporting advice

?Assistance with communication on investors and annual general meetings

?Regulatory filing support and update to governance

?Recommendations regarding future fundraising, mergers and purchases

An experienced consultant concerned with your long-term prosperity will assist you in gaining investor confidence, keeping the company compliant, and preparing it for effective growth in the future. This relationship that keeps perpetuating can be priceless to your company as it progresses in the open market.

Final Message: Selecting a Real Partner

Choosing an SME IPO consultant is not only to do with credentials, but trust, experience and relationship. Spare some time to consider their experience, services they provide, regulation position, networks, and ability to offer long term success to you. Don not hesitate to ask awkward questions, demand references, and sit with several consultants before you give your judgment.

The correct consultant will not only enable you to go through the meter game of going public, but will also enable you to realize untold growth, credibility and opportunity within your business. Through the right pick, you can turn your SME IPO experience into a competitive step-up game- one that will position you to achieve sustainable fortunes in India's ever-changing business environment.