Who is on the team
A typical international offering involves banks, two sets of lawyers, the auditor, an exchange-facing adviser required by the rules of the market, and communication specialists. On smaller listings some roles are combined; on large ones each role may be filled by several firms. The table lists the core roles.
| Role | Main tasks | Works for |
|---|---|---|
| Global coordinator and bookrunners | Valuation, equity story, investor education, bookbuilding, allocation, stabilisation | The issuer under an underwriting agreement, with their own duties to investors |
| Issuer's counsel | Restructuring, prospectus drafting, legal due diligence, corporate approvals | The company |
| Underwriters' counsel | Due diligence on behalf of the banks, underwriting agreement, legal opinions to the banks | The banks |
| Auditor | Audit of historical financial information, comfort letters, review of financial sections | The company, with reporting to the banks |
| Exchange-facing adviser | Eligibility, liaison with the exchange and regulator, ongoing compliance | The company, with duties to the exchange |
| IR and PR advisers | Investor materials, media, the intention to float announcement | The company |
Underwriters and bookrunners
The banks lead the commercial side of the IPO: they test the equity story with investors, propose a valuation range and an offer size, run the roadshow and bookbuilding, set the price with the company and allocate shares. One or two banks usually act as global coordinators, joined by other bookrunners with access to particular investor groups, for example regional institutions in the Gulf or international funds in London.
Underwriting commission is often the largest single cost of the IPO. For US offerings, PwC research on public data reports underwriting fees of about 4-7% of gross proceeds on average; Gulf and Central Asian markets have their own practice, and the fee is negotiated deal by deal. Banks are usually selected through a pitch in which they present their view of valuation, investor demand and the timetable.
Lawyers for the issuer and for the underwriters
Two legal teams work on the same transaction with different clients. Issuer's counsel restructures the group, drafts the prospectus with management and manages corporate approvals. Underwriters' counsel protects the banks: it runs legal due diligence, negotiates the underwriting agreement and requires legal opinions and disclosure letters. Cross-border deals often add local counsel in each country where the group operates, and lawyers in the jurisdiction of the holding company, such as ADGM, DIFC or AIFC.
The auditor
The auditor signs the historical financial information that appears in the prospectus and usually provides comfort letters to the banks on financial data in the document. It is normally appointed first, because audited years under IFRS take the longest to produce. The auditor of the IPO accounts should be independent of any firm that prepared the accounting conversion.
Listing Advisor, sponsor and Nomad
Many exchanges require a specific adviser who is responsible to the exchange for the issuer's eligibility and, often, for its compliance after listing. The name and scope differ by market.
- DFM and ADX: foreign and free zone companies appoint a Listing Advisor for the first year after listing; under ADX rules it must be licensed by the CMA.
- Nasdaq Dubai: a sponsor and a compliance adviser support the listing under DFSA rules.
- AIM: a nominated adviser (Nomad) must be appointed and retained at all times; without one trading is suspended, and admission is cancelled after 6 weeks under the AIM Rules.
- LSE Main Market: a sponsor approved by the FCA must be appointed for a listing in the ESCC category.
- HKEX: sponsors carry out due diligence and are responsible to the exchange for the application.
- SGX Catalist: a full sponsor assesses suitability and supervises the company.
- Bahrain Bourse: a Listing Agent or Lead Manager is mandatory on the Main Board.
- Euronext Growth: a Listing Sponsor is required at admission and on an ongoing basis.
Investor relations and communications
IR advisers prepare the investor presentation, the website investor section and the communications plan for the intention to float, the price range and the first day of trading. After listing the company usually builds its own IR function, because regular communication with analysts and shareholders becomes a permanent obligation.
In what order to appoint advisers
- Readiness adviser and auditor, to start the IFRS track record and identify gaps.
- Issuer's counsel, to design the restructuring and the governance model.
- Exchange-facing adviser where required, to confirm eligibility on the target market.
- Global coordinators, once the equity story and timetable are credible, followed by other bookrunners.
- Underwriters' counsel, appointed by the banks.
- IR and PR advisers, usually a few months before the intention to float.
When comparing proposals, look at experience on the target exchange, the team that will actually do the work, potential conflicts of interest and how fees are structured. Advisers can prepare the company and argue its case, but no adviser can promise approval by the regulator or a successful placement.