IPO Readiness: A guide for floating on the London Stock Exchange

Taking your company public through an Initial Public Offering (IPO) on the London Stock Exchange (LSE) is a significant and transformative decision. Whether targeting AIM or the Main Market, preparation is crucial for ensuring a smooth listing process and long-term success as a public company. This guide provides a detailed overview of the steps required for IPO readiness, from early planning to post-IPO management, with a special focus on the LSE’s requirements and advantages.

Note: While you may also see references to ‘listing’ when referring to an initial public offering, strictly speaking, you only ‘list’ on the Main Market, which is why we use the term floating when generally referring to the process of an IPO.


1. Why early preparation is essential

Starting early is the key to a successful IPO. Companies must be fully prepared to meet the regulatory, financial, and operational challenges of going public. An IPO readiness assessment is a vital first step, offering an external view of your company’s strengths, weaknesses, and gaps. This evaluation covers critical areas such as corporate governance, financial reporting, and tax strategy.

We offer comprehensive and bespoke IPO readiness assessments, addressing governance, financial disclosures, risk management, and even Environmental, Social, and Governance (ESG) readiness.

Incorporating ESG factors into your IPO preparation is now essential, as investors increasingly seek companies that prioritise sustainability and corporate responsibility.

Why early planning matters:

  • Identifies and allows you to resolve potential issues early, reducing stress during the IPO process
  • Ensures flexibility and allows for better timing to enter the market under optimal conditions
  • Strengthens governance, risk management, and internal controls to meet public market expectations.


Is your business ready for an IPO – Take our IPO Readiness Assessment now to find out.


2. The IPO process: navigating complexities

The IPO process is multifaceted, involving collaboration with legal, financial, and regulatory experts. The London Stock Exchange offers distinct paths for companies of different sizes, from AIM, suited to smaller, growing businesses, to the Main Market for larger, established companies.

AIM:

  • AIM is more flexible with its regulatory requirements, providing faster access to capital
  • A Nominated Adviser (Nomad) is required to guide companies through the IPO process.


Main Market:

  • The Main Market has stricter regulatory standards but offers more credibility, deeper liquidity, and greater access to a wider pool of investors.


During the IPO process, companies will need to manage:

  • Financial Reporting and Auditing: Audited financial statements must comply with regulatory standards
  • Corporate Governance: Public companies are held to higher standards in governance, requiring a board with the right mix of skills and independence
  • Risk Management: Implementing a comprehensive risk management framework is crucial to protect shareholder value and avoid post-IPO regulatory scrutiny
  • Equity Story Development: Your equity story should articulate your company’s growth potential, market opportunity, and competitive edge.


We are experienced in supporting companies through this intricate process, offering due diligence services like working capital reviews, and long-form reporting for decades.

For more detail related to the key steps involved in the IPO process, read our IPO Readiness guide.


3. Advantages of floating on the London Stock Exchange

Floating on the London Stock Exchange provides companies with access to deep pools of capital, enhanced credibility, and a platform for growth.

The LSE also offers specific programs to assist companies through the IPO process. We work closely with the London Stock Exchange on their IPO Readiness programs which include workshops and roadshows, helping companies in meeting their regulatory requirements and to manage their post-IPO obligations.

Floating on AIM:

  • Faster and more flexible regulatory environment
  • Access to capital for smaller or growing companies.


Listing on the Main Market:

  • Higher regulatory standards but offers greater investor confidence
  • Enhanced liquidity and access to global capital markets.


4. Post-IPO: sustaining success as a public company

Once a company is quoted, the journey does not end. Public companies face greater regulatory scrutiny, and it is essential to maintain compliance with corporate governance and reporting standards. We provide post-IPO support services, designed to help companies navigate the complexities of public reporting, risk management, and ongoing investor relations.

Post-IPO success involves:

  • Timely Financial Disclosures: Regular reports to shareholders and market regulators
  • Corporate Governance Reviews: Continuous improvement of governance structures and internal controls
  • Investor Relations: Engaging with investors through regular communications, performance updates, and strategic reviews.


5. The importance of ESG in IPO Readiness

In today’s market, ESG (Environmental, Social, and Governance) factors are increasingly important to investors. Companies that prioritise sustainability and social responsibility are more likely to attract investor interest and enhance their long-term value. Including an ESG readiness component in your IPO planning can help position your company favourably.

ESG Preparation:

  • Developing clear sustainability goals
  • Ensuring compliance with ESG reporting standards
  • Communicating your company’s ESG strategy to potential investors.


Best Practices for a successful IPO:

In summary, the most effective strategies for success are:

  • Early readiness assessments to identify gaps and strengthen procedures
  • Market and company-specific IPO pathways that cater to the needs of growing companies (AIM) or larger, established businesses (Main Market)
  • Comprehensive post-IPO support to maintain compliance and manage investor relations.


For a more in-depth dive into getting your business IPO ready for a flotation on the London Stock Exchange, we have developed this IPO readiness guide. Alternatively, you can also take this quick IPO readiness assessment to gauge how ready your business is towards getting ready for a flotation. Want to save time; you can contact us directly by submitting your enquiry here.

By ensuring you address these factors in your IPO readiness process, you not only improve the chances of a successful listing but also lay the groundwork for long-term growth and stability as a public company.

Take your IPO Readiness assessment now

Key Contacts

Ian Cooper

Ian Cooper

Deal Advisory Partner - Transaction Services
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John Stephan

John Stephan

Deal Advisory Partner - M&A
Head of Global M&A
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Jeff Harris

Jeff Harris

Deal Advisory Partner - Transaction Services
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