Initial Public Offerings (IPOs) in Australia are off to a slow start in 2022. Many Australian companies have postponed plans to go public to avoid the impacts of volatile markets shaken by soaring inflation, rising interest rates and an uncertain geopolitical environment. Companies that do successfully list on the Australian Securities Exchange (ASX) need to make sure they are on solid footing to withstand the ongoing volatility. Developing and executing on a comprehensive investor communications strategy is a key element to achieving this.
The IPO process creates a lot of excitement in the media and among investors, and once listed, it is important to keep that momentum going. Following an ASX listing, companies need to navigate a new level of scrutiny, disclosure, and market communications. Furthermore, they need to be across the ASX listing rules, including continuous disclosure obligations, and be aware of all the stakeholders with whom they need to communicate.
POST IPO COMMUNICATIONS STRATEGY
An investor relations (IR) communications strategy will help ensure the IR protocols of being a publicly listed company are being followed. The strategy revolves around achieving the key objectives of achieving fair valuation of a company’s shares, attaining a liquid market in which to trade the shares and gaining adequate access to the capital markets when required.
The first 12-month period is crucial, with a focus on broadening the newly listed company’s buy- and sell-side following. There is likely to be significant demand for company engagement, from both existing and prospective investors. This requires using management’s time as efficiently as possible by developing a structured IR Calendar and by educating the market on the listed entity and its investment case using effective IR materials.
Direct engagement creates a tremendous sense of loyalty with investors and is rewarded over time with investments in the company and access to capital. There will also be an expectation from investors participating in the IPO to have ongoing engagement with management, so setting precedents early on that provide the right balance is important.
Policies and processes should be established prior to market engagement and implemented consistently such as a continuous disclosure policy, results reporting metrics – both operating and financial, investor and media protocols, and a trading policy for insiders. There also needs to be a process to communicate ASX announcements with employees and non-investor stakeholders.
An enormous amount of effort goes into becoming a listed company so in order to optimise the rewards, proactive measures to communicate with the investment community are required. If done well, these measures should help underwrite share price performance, liquid trading and ongoing investor, analyst and media interest. Over time, despite any short-term market fluctuations, this will ensure a full and fair company valuation.
For any Investor Relations enquiries, please contact
Matt Gregorowski mgregorowski@citadelmagnus.com
