How SEA companies can list their IPO on the New York Stock Exchange – Health Guild News


A few years ago, Shopee’s parent company, Maritime Group, was one of the first SEA companies to be listed on the New York Stock Exchange (NYSE). Recently, TDCX, a digital customer experience (CX) provider from Singapore announced that he has done so also on the NYSE.

Closer to home, MoneyLion’s Foong Chee Mun became the first Fintech founder in Malaysia to obtain an IPO on the NYSE. There have also been headlines around Grab, PropertyGuru and similar tech giants heading towards the same goal.

These success stories have raised questions from SEA soonicorns (who will soon be unicorns) who are also fighting for similar advances. In a Wild Digital SEA 2021 panel, Laurent Junique, founder and CEO of TDCX, shared his ideas on how he knew his startup was ready to go public.

He was joined by Andy Tai, the general manager of Goldman Sachsand Delano Musafer, NYSE Head of capital markets at APAC, the team that helped TDCX trade.

Moderated by Kit Wong, CFO of Catcha Group, the discussion shed light on the benchmarks required by SEA startups to obtain their IPO list. The panelists also explored the areas of consideration that companies need to consider before doing so.

But what’s so great about the NYSE?

The NYSE is known to be one of the “gold standards” for companies around the world for listing. Apart from the prestige it has, it is said that companies that do their IPO there have better investment opportunities and greater liquidity, according to Delano.

In addition, the NYSE is also unique because it has human market creators on the ground who are assigned to oversee the actions of some companies. They even have to pledge their own capital to support the shares of their businesses, so that investors and issuers have more confidence in their shares.

This encourages market makers to make sure the assigned companies work well.

Kit added his two cents: “Why it’s worth it, Catcha Group is also listed on the NYSE and is partly due to the human element of market creation, having someone to talk to makes all the difference.”

How to know that your company is ready for the list

Become a unicorn

Laurent started the discussion with his experience on how he knew TDCX was ready for its IPO. Having grown from 13 to 14,000 employees over 26 years, TDCX has grown from providing its Customer Experience (CX) solutions only to Singapore customers to SEA customers.

Shortly afterwards, the team realized the potential of TDCX to capture the global market as well, which led Laurent to decide to bring TDCX to the public market.

Andy presented his points from a market capitalization perspective, stating that the general rule for a company to know that it is ready for public listing is to achieve unicorn status first. Having a market capitalization of at least US $ 1 billion is useful because it shows that a company is on a scale that would matter to investors.

“At that point, you’re too big for investors not to look at you,” Andy said.

Delano agreed, but revealed that NYSE listing standards only require a minimum market cap of $ 200 million to receive an IPO, but achieving unicorn status is advantageous.

Get to know your market in shape

While IPOs are generally agnostic about the type of companies listed, Andy stressed the importance of companies knowing their total addressable markets and plans to grow from there. But first, a company needs to take a step back to review what its business is about and find out how it can serve the market, nationally or internationally.

To illustrate his point, he noted the success of the Indonesian market, Bukalapak, which figured national stock exchange in Indonesia. He said the company had a very strong understanding of its local market, as reflected in its brand and internal systems.

Laurent intervened with his experience on the ground. When choosing which stock market TDCX would be listed on, they were advised to look at which markets had more industry peers in their industry and found it in the US.

However, having more colleagues in the industry meant greater competition, which meant that TDCX had to differentiate its history and offerings so that it stood out.

“Because we came from SEA, a high-growth region, we had a unique proposal for investors. Now we have not only chosen the United States, we have chosen the NYSE, as we believe it is important to have an exchange driven by entrepreneurial support, that it was spectacular there ”, shared Laurent.

TDCX was also warned that the NYSE was a market that also had more liquidity and doing an IPO in it would give the company access to global investors.

“To give you a figure, the NYSE trades around US $ 150 billion every day, so it’s a lot of liquidity,” Delano added.

Have a solid business career after the IPO

The panelists noted that companies that want to go public also need to set up their business trajectories. This includes the company’s future fundraising plans that are linked to the exchange liquidity perspective.

Laurent could relate to this and recalled that TDCX postponed its list when the pandemic hit in 2020. This was because the team did not have enough visibility into the future of how the company would operate during the pandemic or in the new normal. .

“We wanted to be better positioned to tell our story to investors. We didn’t want to be in a position where we didn’t know what to do,” he said.

“You want to have confidence and be able to project where the company is going in the coming quarters. You want to put your best foot forward. “

Preparing to make public

Put your papers in order

Based on Andy’s experience, companies generally underestimate the amount of effort and time it takes for a company to go public. He also explained that the start of the listing process involves hiring bankers, accountants and lawyers to begin the audit and submission of the necessary documents.

This process usually takes between 6 and 8 months before anything else can happen, such as marketing the company to investors.

Andy advised companies looking to list to start thinking about the future and get their paperwork done like financial statements and other documentation in order before even hiring the necessary professionals.

“Keep in mind what auditing standards you will be subject to because national and U.S. exchanges have very different accounting standards,” he added.

Prepare your team

Another thing a company has to solve in addition to paperwork is its internal corporate governance. The team needs to be mature enough and aware of the extra work beyond their daily work.

There is a lot of work and commitment, not only when it comes to listing, but for the future as a public company, Laurent said.

Be prepared for public scrutiny

Laurent shared that an important difference between being a listed company and a private one is the increase in public scrutiny to which it is now subjected. Because the company will now have to report quarterly on its financial performance and projections, there will be an increase in administrative tasks, profit reports, and so on.

I see it from an adult perspective and it is a good effort for a company to be more structured, more organized and more transparent to pave the way for future growth. It also reminds us that the IPO is not the end of the journey, it is the beginning.

Laurent Junique, founder and CEO of TDCX

If you are not prepared for the amount of work, do not force an IPO unnecessarily

This was stated by the speakers, who stated that there is not exactly a “bad time” to make themselves public. However, poor results can occur if a company and its team are not mature enough or prepared for the amount of effort involved in being listed on a stock exchange.

Some of these examples may range from a listed company that does not have a profit report, or that does not achieve its objective results and remains stagnant.

Undoubtedly, this points to the fact that companies that want to go public must have a very solid understanding of their business, how it adapts to the market, with the support of a strong and united team.

“That’s why I’m insisting that companies should think about preparing for an IPO long before because these key areas take a long time to develop,” Andy concluded.

  • You can learn more about Wild Digital here.
  • You can read more about what we wrote about Wild Digital SEA here.

Featured Image Credit: Laurent Junique, founder and CEO of TDCX / Delano Musafer, head of capital markets at APAC on NYSE / Andy Tai, CEO of Goldman Sachs

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