Initial Public Offering (IPO)
Initial Public Offering (IPO), SMEs in the UAE can raise funds through IPO very soon that the SMEs in the UAE owned by the UAE nationals will be able to take Initial Public Offering (IPO) route in order to raise funds in the near future. With regard to SMEs opting for Initial Public Offering (IPO) for fundraising to quote Dr Adeeb Alafeefi, Director for The National Program for SMEs under the Ministry of Economy, "As we speak, we are working with federal securities authority to look at applying such methods in getting loans and (opting for) IPOs through bourse for the SMEs. It is at a very early stage but, nevertheless, negotiations have already started and we're looking to forward to see something resolving in 2020," he has mentioned. The plan has been initiated to support and encourage the businesses for SMEs owned by UAE Nationals in the UAE. The national program scheme in the UAE for SMEs owned by UAE Nationals also provides financial support ranging from AED 300,000/- to AED 30 Million which will depend on the kind of business they are practising. These kinds of SMEs are also given 90% support in funding to take part in local and international exhibitions.
What SMEs owned by UAE Nationals can expect in the year 2020?
- New Year 2020 is expected to bring 16 new initiatives for SME owners in the UAE
- There shall be Training Programs scheduled in all the seven emirates of UAE, which is expected to draw 3,000/- UAE Nationals. The outline of the program will constitute of marketing strategies and managing your books of accounts.
- SMEs owned by UAE Nationals can offer franchise to local or international companies
- An exhibition to be hosted in Abu Dhabi for UAE Nationals owning SMEs
- An exhibition and a conference for GCC companies in the world’s greatest show, Expo 2020
- The Programs for SMEs shall be connected electronically with European Entrepreneurship consisting of 11,000 Members enhancing professional networking
~Source: Khaleej times (https://www.khaleejtimes.com/smes-owned-by-nationals-will-soon-be-able-to-take-ipo-route)
What is Initial Public Offering (IPO)?
The Initial Public Offering, IPO is one of the methods for companies to raise funds by listing the company’s shares on the public exchange through the issuance of public share ownership. While listing the company shares on public exchange new shares are created, underwritten and sold to the public. The underwriter is the middleman who works with the company throughout the process of Initial Public Offering (IPO). The underwriter extends its support to initiate buyers with the initial offer price, complies with all the regulatory requirements, sells investors. How does Initial Public Offering (IPO) work? Before a business opts for Initial Public Offering (IPO), they are considered to be a private company. Once a business is matured enough to opt for Initial Public Offering (IPO) there are a few processes on how it works:
- Hiring of underwriters
- Comply with all the rules and regulations to file for Initial Public Offering (IPO)
- The paper works, reports of financial status are to be kept ready to submit to the concerned authority
- A specific date must be chosen to list the company publicly
- The price of the shares must be fixed
When is it the right time for businesses to opt for Initial Public Offering (IPO)?
The right time for businesses to opt for Initial Public Offering (IPO) is when the business is healthy and steady. It is significantly important to determine on how our business is running before you make your business public. Opting for Initial Public Offering (IPO) might not be a good choice when the business is not stable and not functioning well. Also, if your business is flourishing and the future projections show a steady growth it shall be a good time for Initial Public Offering (IPO).
What are the advantages of Initial Public Offering (IPO)?
- It gives businesses an opportunity to raise a huge amount of money through shares
- While raising funds it also allows the company to expand
- It is a transparent process which attracts investors and keeps good terms
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