What a readiness assessment is for
An IPO readiness review, often called a gap analysis, compares the company as it is today with what an exchange, a regulator and institutional investors will expect on the day the prospectus is published. The output is a list of gaps, an owner for each gap, a realistic timetable and a short list of exchanges where the company could qualify.
The review is usually carried out by the CFO with an external adviser or an audit firm that will not later act as the company's statutory auditor. It takes several weeks for a mid-size group and relies on documents rather than interviews alone: audited accounts, management accounts, the shareholder register, key contracts, licences and board minutes.
Five areas that decide readiness
Financial reporting
Most international exchanges expect audited financial statements under IFRS or an equivalent standard for a defined number of years. Under the DFM Listing Rules, foreign and free zone companies need 2 years of audited accounts; the DFSA Markets Rules for the Nasdaq Dubai Main Market ask for 3 years of audited IFRS accounts; the Saudi Exchange Main Market requires 3 years under SOCPA-endorsed standards. The question is not only whether accounts exist, but whether they can be audited to a standard that supports a prospectus.
Corporate governance
Investors look for a board that can challenge the founder, independent directors, audit and remuneration committees, a clear policy on related party transactions and an internal control framework. In family businesses this is often the longest piece of work, because it changes how decisions are taken.
Operating history and track record
Exchanges test history in different ways. HKEX Main Board requires a 3-year trading record with management continuity. AIX Main Market expects 3 years of audited statements with at least one profitable year, while its REMS segment accepts 1 year. Material acquisitions or disposals during the track record period may require additional historical financial information.
Scale
Size drives both eligibility and investor interest. The Nasdaq Dubai Main Market sets an expected market value of at least USD 250 million, the LSE Main Market at least GBP 30 million, and AIX at least USD 1 million. Beyond the rules, a very small free float rarely attracts institutional demand or research coverage.
Market and equity story
Investors buy a growth story supported by numbers: market position, unit economics, use of proceeds, dividend policy and management depth. A company should be able to explain in one page why it is going public now and why on this exchange.
Readiness checklist
| Area | Question to answer | Typical evidence |
|---|---|---|
| Reporting | Are there audited accounts for the years the target exchange requires? | Signed audit reports, IFRS or acceptable GAAP |
| Reporting | Can the group close its books and report quickly and consistently? | Monthly close calendar, consolidation model |
| Governance | Does the board include independent directors and working committees? | Board charter, committee terms of reference |
| Governance | Are related party dealings identified and approved? | Register of related party transactions |
| Legal structure | Is there a single holding company owning all operating assets? | Group chart, share registers, title documents |
| Legal structure | Are licences, real estate and IP held by the right entities? | Licence list, title and IP registers |
| Track record | Has the core business been stable over the track record period? | Segment reporting, management continuity |
| Scale | Will the expected market value and free float meet the exchange minimums? | Indicative valuation range, offer structure |
| Market | Is there a clear equity story and use of proceeds? | Business plan, investor presentation draft |
| Compliance | Have tax, sanctions and AML exposures been reviewed? | Tax review, sanctions screening, KYC on shareholders |
How exchange choice changes the assessment
The same company can be ready for one market and far from ready for another. Free float is a good example: 20% is the Category One threshold under DFM rules, 25% on Nasdaq Dubai, 30% on the Saudi Exchange Main Market and 10% under the UK Listing Rules for the LSE Main Market. AIM sets no minimum free float or track record in its rules, but a nominated adviser must judge the company appropriate for the market.
Corporate form matters as much. An onshore issuer on DFM or ADX must be, or become, a UAE public joint stock company, while Nasdaq Dubai accepts issuers from any jurisdiction without conversion. For many groups from Central Asia this single point shapes the whole restructuring plan.
Typical findings and timelines
- Accounts prepared under local GAAP only, with no IFRS comparatives for prior years.
- Operating assets spread across several jurisdictions with no common parent.
- Founder approval as the only real decision process, with no documented board practice.
- Undisclosed transactions with companies owned by shareholders or their relatives.
- Tax positions that have never been reviewed by an independent adviser.
None of these findings rules out an IPO. They define the plan: which stages run first, which can run in parallel and when it makes sense to start talking to banks. Advisers commonly describe 12-24 months from the start of preparation to listing for a well-organised group. The next steps of this guide cover IFRS and audit, restructuring and governance in detail.