Many private companies use the IPO route to fund their growth, financial needs, and requirements. The goes beyond a source of raising funds and money for the company and the business and gives the company a chance to enhance and build its brand and public image.
What is an IPO
An Initial Public Offering,, is a private company proposing to go public by issuing shares to the public for the first time. Companies looking to raise capital for the business’s growth and expansion issue an Initial Public Offering.
Why do Companies go Public?
- One of the primary reasons for a private company to go public is to raise finance for the business’s growth and expansion.
- Public companies offer a better interest rate while raising debt due to the intense scrutiny required for public limited companies.
- Open market trading translates into liquidity.
- Public limited companies can adopt innovative tools to retain talent, such as employee stock options.
IPO as a tool for Brand Enhancement
Companies can utilize the launch of their Initial Public Offering as a tool for enhancing their public image and brand image within the public. Companies need to set their brand strategy in place along with their public financing strategy. A company needs to take an honest look at its brand image from the public’s fresh perspective. The company should ask itself how strong its brand image is. How do the people see and perceive its brand? Does the company’s brand reflect an ethical business model with robust integrity? Are the products and services of the company in line with the company’s brand? Does the present brand image of the company add value or devalue its IPO valuation? Is the messaging platform of your brand sustainable after the IPO? Have there been any changes in the company’s brand image in the last few years?
The company needs to dig deep within its brand image and public image and critically analyze its present standing regarding its public image, evaluate what kind of brand image the company desires, and plan a roadmap toward achieving its goals.
The company can undertake the following steps towards repositioning its brand image.
- Develop a Factor of Differentiation of your Brand from your competitors.
The company needs to evaluate its competitive advantages and further analyze whether it is reflected in its brand, public image, identity, and external communication. If the answer is no, in that case, the company should develop a branding strategy and formulate a robust plan for rejuvenating its brand image and ensuring a positive positioning of its corporate brand. Generally, during an IPO, a company should offer the investors and customers something innovative and original to enhance its corporate branding and brand image.
- Building a Robust Brand and Corporate Image
The company’s image and reputation are largely built by its actions, i.e., by what it says and does. It is essential for the business to develop its platform for corporate communications and to message and ensure it is up-to-date, current, and relevant. The company can use this platform to deliver important messages. The company must also ensure its executive management follows the same corporate communication rules. The company must also provide its employees with an understanding of the importance of following its disclosure policies.
Some of the non-financial metrics that aid in enhancing a company’s IPO value are its reputation, customer satisfaction, integrity, etc. Hence, a company needs to understand its intangibleand communicate them to the public subtly and non-directly. Companies and businesses can leverage their intangibles towards building strong brand value. The importance of these intangibles has increased in the last few decades, and hence, it is important to maintain and leverage them,
- Keep your message clear, consistent, and concise.
This is applicable way beyond the company’s ROC and SEBI filings required for compliance. The company should work towards developing important messages for its stakeholders regularly. The company should keep its messages concise and consistent about its values. In case the company makes an error, it should be prompt to apologize and take necessary corrective action rather than on the defensive mode.
- A well-informed investor is highly receptive.
A company needs to develop a strategy for media relations, especially if it wishes to enhance its brand image. A good idea in the media is important, especially with the financial media press and the general business media before the launch of your IPO.
Establishing the business strategy for transparency and engagement about its performance and design by creating knowledge resources regarding your company, its products, services, brand image, etc.
The corporate brand is an important non-financial element that can positively portray the brand and the organization. A company with a robust and compelling brand presented and positioned significantly adds a lot of value to the company’s IPO. It will also help the company sustain and grow the value of the company and its brand value after the IPO’s aftermath.