Listing your company is a milestone for your business – it is a statement of intent moving from a private limited company to a public company. There are certainly many benefits and reasons why you should list your company after its incorporation, but it is also important to consider the drawbacks of such a momentous move.
There are plenty of reasons for listing your company, some of which include:
Access to funding
The main reason for companies to go public is the access to capital through an Initial Public Offering (IPO). The capital from the IPO goes a long way in financing its growth, expansion plans, upgrading its infrastructure, or to pay off its debts.
Generally, it is easier for a public company to purchase stocks as compared to private companies. The company’s stocks are available to the public to purchase on a platform where both buyers and sellers are in.
Stocks can be used as forms of payments for various stakeholders such as employees and administrators. These shares-related remuneration plans can help to attract and retain top talents.
Brand image & status
Another good reason to go public and get listed is to establish and heighten your brand’s status as the public’s perception of listed companies is often associated with success. This helps not only to attract more investors, but also top talents.
Considerations for Listing
Before you consider listing your company, it is crucial for you to consider the potential drawbacks carefully. These considerations are:
Lack of privacy
Going public, there is bound to be a lack of privacy when it comes to your business-sensitive information. This information will be required to be shared with relevant authorities and public shareholders.
Complicated & time-consuming procedure
It’s never an easy task to go public – the process is time-consuming and can be complicated, taking time away from doing actual on-ground work and operations. This could potentially affect the productivity of the company.
As mentioned earlier, publicly listed companies are obliged to share all their data to governing bodies. The preparation and compliance can be tedious task, and the company would need to spend valuable monies for executing and complying with the regulations by SGX.
Why Should I List My Company on the Singapore Stock Exchange
SGX prides itself on being Asia’s key risk management centre with a diverse range of innovative products and fast-to-market services. Aside from that, there are also other reasons why companies opt to be listed on SGX.
International listing hub
Singapore’s strategic location and best-in-class connectivity put the country on the map as a top investment destination. Ranked 2nd in the Ease of Doing Business by The World Bank, Singapore is home to many businesses and is one of the most competitive economies in the world.
As the wealth management hub in Asia and being the largest foreign exchange trading centre and active commodities trading centre in Singapore, there is a higher potential to reach global investors.
Trusted regulatory regime
When it comes to Singapore’s financial market, it is built on a robust and efficient legal and judicial framework. As such, the country is one of the few in Asia to achieve an “AAA” rating.
FUN FACT: To get your company listed on SGX is less costly compared to stock exchanges in other countries. However, it depends very much on the amount of shares that you can raise.
Requirements to Get Listed
Depending on the lifecycle of your business, there are two categories on SGX when it comes to listing.
Mainboard – for more established enterprises
Catalist – for fast-growing enterprises
The core requirements to get listed on the mainboard are summarised below.
Mainboard – to fulfil at least one of the following:
Minimum consolidated pre-tax profit of at least S$30 million for the latest financial year with operating track record of at least 3 years
Profitable in the latest financial year, and has a market capitalisation of not less than S$150 million based on the issue price and post-invitation issued share capital with operating track record of at least 3 years
Operating revenue in the latest completed financial year and a market capitalisation of not less than S$300 million based on the issue price and post-invitation issued share capital. Real Estate Investment Trusts and Business Trusts who have met the S$300 million market capitalisation test but do not have historical financial information may apply under this rule if they are able to demonstrate that they will generate operating revenue immediately upon listing.
For Catalist, there is no minimum quantitative criteria required by SGX and Sponsors will use their own house deal selection criteria.
NOTE: For Mineral, Oil, and Gas (MOG) companies, there is a separate set of requirements in order to be listed. You can find out more about the requirements on SGX.
Looking to make the switch from a private to a public company, or ready to incorporate your company? Reach out to us for a free consultation, and see how we can be part of your journey!
Singapore Exchange Limited (SGX, SGX: S68) is an investment holding company located in Singapore and provides different services related to securities and derivatives trading and others. SGX is a member of the World Federation of Exchanges and the Asian and Oceanian Stock Exchanges Federation.
Can I delist my company on SGX?Tommy2021-09-06T11:17:20+08:00
There are various listing fees to take note of, and the cost of listing is dependent on whether you are being listed on the Mainboard or Catalist. You may find the full list of costs for Mainboard listing here and Catalist listing here.