There are various reasons why a company should consider an IPO.
Company will gather a significant amount of funds by opening up to the public and allowing shares to be traded in an organized market.
Benefits of IPO:
Public offering primarily provide companies the opportunity to obtain capital through a reliable organized, transparent market structure.
The shares offered to the public can be bought and sold in a transparent manner at the prices determined according to the market supply and demand at an arbitrary time, liquidity is provided to the shares and an important opportunity is provided to existing shareholders.
Various information about the companies whose shares are traded on the Exchange are constantly being delivered to the foreign investors through global press, data broadcasting and other visual broadcasting organizations within the framework of the transparency of the Exchange and the function of public disclosure.
Being publicly traded adds to a company’s stature as an institution, which can enhance its competitive position.
Companies can create financing opportunities not only with the primary public offering but also with “Secondary Public Offerings” according to the resource requirements arising from their investment and similar needs while restricting the pre-emptive rights of existing partners.
Listing their shares in the Exchange, companies increases their credibility in banking and money market which enables to obtain loans cheaper and easier.