Companies often struggle to adjust to the increased public scrutiny and expectations that come with going public. They grapple with the complexities of financial reporting, governance and compliance requirements, risk management, data privacy and cyber security, investor relations and also face challenges of managing the expectations of their shareholders. Some of the common pitfalls faced are:
An IPO is transformational journey
Going public
Being public
And evolving regulations
Companies Act 2013
ICDR Regulations
SEBI Guidelines
Ind AS
ICDS
Listing Regulations
Data Privacy
Prohibition of Insider Trading
Challenges faced by companies
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Meeting the regulatory compliance requirements and disclosures imposed by financial authorities
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Identifying, reviewing and processing information to be included in the offer document
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To ensure promoters, Key Managerial Personnel and employee are compliant with laws and standards
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Implementation of control and processes in the organisation
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Articulating cohesive equity story capturing relevant Key Performance Indicators (KPIs)
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Protection of unpublished price sensitive information (UPSI)
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Manage company’s reputation, as there has been heightened scrutiny from investors, analysts and the media companies.
- IPO readiness
- Investor Relations
- Prevention of Insider Trading
An IPO journey is long, complicated and requires intense strategic planning and execution to avoid the potential challenges that come with the responsibility of transitioning to a public entity.
Bracing the transition and what does it entail?
IPO readiness demands change in various facets:
KPMG in India’s IPO readiness scan is a diagnostic to assess your readiness to go public.
Our approach
At KPMG in India, we put together all the relevant skill sets to provide a thorough approach to guide a private company through its IPO journey. The approach integrates financial expertise, strategic guidance and regulatory acumen for a smooth transition to the public markets.
Our IPO readiness assessment is spread across below workstreams:
Tax
Strategy and equity story
Business intelligence
IT and process improvement
Margin enhancement/ Cost analysis
Environmental, Social and Governance Strategy
Financial Reporting and Disclosures
HR and people related
Risk management
Investor Relations (IR) is a strategic business function aimed at engaging with the financial community and other stakeholders to communicate a company’s value proposition through effective dissemination of the equity story, building and sustaining optimal valuation.
The role of an Investor Relations professional is critical in maintaining effective communication between the company and investors. However, this role comes with its fair share of challenges that require skillful navigation.
Key challenges faced by an IR professional
To overcome these challenges, an effective IR programme is required which helps to convey the true value of a company, provide valuable inputs to management, and reduce the cost of raising funds.
With all the relevant skills and experience put together, KPMG in India is well poised to advise companies on effective communication strategy to derive benefits from its IR programme.
KPMG in India offers a wide range of IR advisory services to cater to the varying requirements at different stages of the company’s journey. These services can be tailored to overcome challenges faced by the company and meet their strategic goals.
How can KPMG in India help?
IR support at the pre-IPO stage is instrumental in setting the foundation for a successful IPO and establishing a relationship with investors. At this juncture, we can support you with:
- Develop IR policies, IR strategy and SOPs for the effective functioning of IR department
- Setting up your IR department
- Establishing an IR portal on your corporate website
- Articulating equity story via investor presentation
- Developing IR collaterals for conducting pre-IPO roadshows
- Coaching senior management on investor communications.
How can KPMG in India help?
IR support during this stage is crucial to ensure a successful transition from private to public listed entity. At this juncture, we can support you with:
- Roadshows and investor meetings to attract potential investors
- Assist management in defining and compiling the Key Performance Indicators (‘KPIs’)
- Investors and analyst’s feedback on upcoming IPO
- Assist the companies in select areas during preparation of prospectus
- Assistance in articulating and defining the equity story.
How can KPMG in India help?
Once listed, companies are under far greater public and regulatory scrutiny, with a wider universe of stakeholders, associated risks and obligations to handle.
We offer IR support on a wide range of public company matters with critical focus on the following:
- Enhancing IR disclosures by effective portrayal of equity story in investor and earnings presentation
- Bandwidth support to perform quarterly activities i.e., earnings presentation, earnings press release, factsheet, peer and market analysis, investor profiles, shareholding analysis, investor interaction, peer group analysis etc. by way of retainer engagement
- Shareholding and cross-holding analysis for investor targeting
- Perception study to gauge market feedback on the company’s business, strategy, corporate action, ESG, etc
- IR Benchmarking and IR review to strengthen investor communication by way of adopting leading IR practices
- Assessment of ESG disclosures and whether the company is able to meet investors’ expectations
- Corporate reporting by way of Annual report, Integrated report, Business Responsibility and Sustainability Reporting (BRSR)
- Develop and deploy technology solution to support IR activities and aid as an IR tool
- Providing strategic guidance and support for proxy advisory engagement.
Whether you are a listed or an unlisted company, the investor relations advisory support from KPMG in India can help in managing and developing your investor relations and further, with preparation of an IPO, merger and acquisition, demerger, reverse merger process.
Insider trading is viewed as a serious crime as it breaches the underlying trust among stakeholders in a free and fair capital market. However, insider trading violations and leakage of unpublished price sensitive information (UPSI) have become increasingly common. The consequences of such violations can be severe and cause reputational damage.
In recent years, Securities and Exchange Board of India (SEBI) has brought about extensive regulatory amendments to enhance compliance related to prevention of insider trading (PIT) to make market manipulations easily identifiable and to ensure a fair and level playing field in the Indian capital markets.
1. KPMG Trading Compliance Manager: (KTCM)
*Structured digital database
KPMG Trading Compliance Manager KTCM is equipped with an automated digital solution in order to comply with SEBI’s guidelines under PIT regulations for maintenance of a non-tamperable structured digital database with audit trail and time stamps.
2. Training and awareness programmes:
3. Assistance in review/formulation of codes/policies pertaining to Prevention of Insider Trading
4. UPSI controls gap assessment
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Review the adequacy and effectiveness of controls in place (if any) for adherence to regulatory and/ or company guidelines for classification, identification and safeguarding UPSI
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Undertake sample checks of select IT systems along with the review of logs, as required to test the effectiveness of established controls and identify potential vulnerabilities
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Recommend better practices to be adopted towards securing UPSI and for risks identified
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Conduct awareness sessions among staff handling UPSI.
