Understanding Intricacies of IPO Communication

IPO PR has gained much traction within the communications spectrum in India in recent years. EY India report stated that India demonstrated an outstanding performance in the Initial Public Offering (IPO) market in 2023. The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) emerged as global leaders in IPOs last year. Power & Utilities, Health, Automotive & Transportation, and Banking & Capital sectors led the IPO surge during this period. We saw the trend continuing in 2024 with several high-profile public offers across the industry verticals. IPO is the most strategic move and once-in-a-lifetime event for any company. It is a process where a privately held company transitions into a publicly listed company by offering its shares to the public (including institutional, foreign and retail investors). Companies decide to go public for several reasons, including raising capital for business expansion, fulfilling working capital needs, or clearing debts. The project demands resources, time and teamwork of experts from external consultancies, including consultants, legal advisors, merchant bankers, auditors, analysts, and PR experts.

PR/ Communication is an integral part of the IPO exercise and requires strict adherence to regulatory compliances. It is a golden opportunity for PR/ communications professionals to work closely with company leadership and external consultancies with vast domain expertise. During the project, they coordinate with the Book Running Lead Manager (BRLM), who drives the entire IPO process, bankers, auditors, legal advisors and other stakeholders for drafting disclosure documents such as DRHP, RHP, prospectus, industry reports, investor PPT and other crucial reports. They also learn about the intricacies of the capital/equity markets, legal frameworks and regulatory restrictions. Comms pros are supposed to follow the framework laid by the Securities and Exchange Board of India (SEBI). Any mistake may adversely impact the company’s IPO efforts. Hence, communications professionals should exercise utmost care, intelligence and patience to help the company navigate the crucial process.

Though content creation and media engagement are crucial aspects of IPO PR, they demand additional skill sets to drive the communication mandate efficiently. Here are a few skillsets required for IPO communication.

Knowledge of the IPO Process

IPO is a vast and expansive project with several critical phases such as preliminary planning, selection of BRLMs, due diligence, drafting of disclosure documents such as DRHP, RHP & prospectus, SEBI filing and approval, investor roadshows (institutional and retail), pricing and allocation, IPO subscription and allotment, listing on stock exchange and post IPO compliance. Comms pros should have a thorough understanding of each phase and their role in it. The key mandate of IPO PR is to create a positive outlook on the company and attract potential investors. However, comms teams should adhere to regulatory compliances while engaging with media.

Understanding of Capital/Equity Markets

Basic knowledge of the capital/equity market is an added advantage for comms pros as it helps them engage with various internal and external stakeholders. Start tracking the capital markets, watch for industry reports and follow financial experts on social media. You may connect with the internal finance team, such as the CFO, accounts heads, and internal auditors, to demystify complex financial reports for readers. IPO preparedness typically starts 18-24 months before the actual process begins. Leverage this time to enhance your knowledge about the capital market.

Ability to read and analyse financial statements/ offer document

Comms pros should learn to read financial statements as numbers are key in IPO PR. They should understand various financial jargon and concepts to present their story effectively. Also, comms pros should master the disclosure document: Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP) and Prospectus. These documents reveal essential information about the company, its financial standing, risk factors and future growth prospects to potential investors. The entire IPO communication revolves around these three documents, and comms pros should ensure that their message aligns with the disclosures made by the company.

Multi-tasking under tight deadlines

IPO is one of the most exhausting projects and requires coordination between multiple teams. Comms pros should be able to multi-task and produce error-free results in tight deadlines. Comms pros should be flexible to take up responsibilities beyond their regular mandate during these phases. For instance, they may travel to multiple locations and manage onsite event arrangements during investor roadshows or press conferences. They may also be required to provide advertising/ marketing support. Be open to taking up new and challenging tasks.

Coordination and team spirit

Finally, an IPO is a team project involving domain experts, consultancies, service providers, advisors and other key stakeholders. IPO comms require inter-departmental coordination to acquire crucial information for media pitches and potential stories. It is also an opportunity to learn about subjects/concepts beyond the scope of regular PR work. PR pros should be able to work in a team and manage conflicts efficiently to drive successful IPO PR campaigns.

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Priyanka Pugaokar

Priyanka Pugaokar is a communications professional with expertise in internal and external communication, crisis communications, content generation and media relations. She holds over ten years of combined experience in communications and business journalism. She is currently associated with Rashi Peripherals Limited as Corporate Communications Manager and leads several strategic projects. She is an avid travel explorer. A lifelong learner, she holds interest in yoga, naturopathy, energy healing and crystallography.