The IPO roadmap, phase by phase

The shape of an IPO

Every IPO looks different in its details, but the underlying sequence is stable across markets. It can be described as five phases. The first two are under the company's control; the last three depend increasingly on investors and market conditions.

The lengths above are illustrative ranges seen in practice, not rules. A company that has been reporting like a listed company for years can move much faster than one starting from local accounting standards.

Phase 1: readiness

Readiness is about whether the company could survive the scrutiny of a public offering. The core questions:

• Financial history. Are there audited financial statements for the periods the prospectus will need, prepared under the accounting standards the exchange requires (in the EU, IFRS for regulated markets)? Will a conversion or restatement be needed?
• Close and reporting speed. Can the finance team produce reliable quarterly figures quickly enough to meet listed-company deadlines?
• Controls. Are there documented internal controls over financial reporting? Could management sign off on them?
• Governance. Does the board have independent members? Are audit and remuneration committees in place or planned?
• Legal structure. Is the issuing entity the right legal form for listing (for example a stock corporation)? Are group structure, intercompany agreements and shareholder agreements clean?
• Equity story. Is there a plausible reason for investors to buy, which the numbers support?

See IPO readiness and the finance and reporting readiness guide.

Phase 2: preparation

• Adviser selection. Global coordinators and bookrunners, legal counsel for issuer and banks, auditors, IR and PR advisers, sometimes an independent IPO adviser. See building the IPO team.
• Kick-off. A meeting that sets the timetable, responsibilities, workstreams and document list.
• Structure decisions. Primary versus secondary shares, offer size, free float, listing venue and segment, retail tranche or not, employee offering, use of proceeds.
• Pre-IPO reorganisation. Legal form conversion, capital measures, share classes, management incentive plans, cleaning up related-party arrangements.

Phase 3: documentation

• Due diligence. Business, financial, legal, tax, commercial and sometimes technical or environmental reviews. The banks and their counsel need to be able to defend the prospectus content.
• Prospectus drafting. Repeated drafting sessions over weeks. Risk factors, business description, operating and financial review (the MD&A), capitalisation, use of proceeds, management and governance, shareholder structure, terms of the offer and historical financial information.
• Comfort letters. The auditors confirm that financial figures in the prospectus agree to audited or reviewed records, and perform procedures on the period since the last balance sheet.
• Regulator review. The prospectus is filed with the competent authority (or the SEC in the US), which comments in rounds until it approves.
• Analyst research. Analysts at syndicate banks prepare pre-deal research based on a management presentation. Strict separation rules apply between research and the deal team.

Phase 4: marketing and pricing

1. Early-look and pilot fishing meetings with selected investors give feedback on the story and valuation before anything is announced.
2. Intention to float (ITF). A public announcement that the company plans to list, usually followed by investor education by the analysts.
3. Price range and prospectus publication. The company sets a price range based on investor feedback, publishes the approved prospectus and opens the books.
4. Roadshow. Management meets investors in one-on-one and group meetings across financial centres, increasingly in hybrid form.
5. Bookbuilding. Investors place orders with price limits. The bookrunners track demand quality, not only quantity.
6. Pricing and allocation. The final price is set, shares are allocated, and trading starts.

See marketing, bookbuilding and pricing.

Phase 5: after listing

• Stabilisation. The stabilisation manager can support the price for a limited period, using the over-allotment (greenshoe) option.
• First reporting cycle. The first quarterly or half-year report as a listed company is a test of credibility.
• Lock-up expiry. When restrictions on existing shareholders end, the market watches for selling.
• IR routine. Earnings calls, conferences, analyst coverage, AGM.

See life after the IPO.

Workstreams to run in parallel

A practical IPO project plan usually has these workstreams, each with an owner:

• Financial reporting and audit (historical figures, interim figures, comfort letters, pro forma information)
• Legal and corporate (structure, articles, board, agreements, prospectus legal sections)
• Tax (structure, transaction taxes, management plans)
• Equity story, business plan and valuation inputs
• Prospectus coordination
• Investor relations and communications (website, IR function, ITF, media)
• HR (board and management contracts, incentive plans, employee offering)
• Systems and controls (reporting tools, disclosure committee, insider list process)
• Data room and due diligence logistics

Critical path

In almost every IPO, the timetable is set by the financial statements. The prospectus needs audited figures and, depending on timing, reviewed interim figures that are not older than certain limits. Missing a cut-off can push the whole project into the next window. Map the reporting dates first, then plan everything else around them.

Build your own back-scheduled plan with the IPO timeline planner.