Capital Raising: Fewer Firms Embrace IPO Market.


Monday, May 26, 2014 8.27PM / TheAnalyst

Access to fresh capital exclusively remains a critical part of a company’s strategy, as companies generally need to understand how best to fulfil this ambition and purpose in order to fit in and also achieve its corporate goals and objectives.

Capital raising or financing helps businesses achieve their corporate dream of moving to the next level in their business line and it can come in different forms which include:

1.        Debt Products

2.        Private Placements

3.        Equity Products

4.       Private Equity

5.       Securitization

6.       Corporate Lending

7.      Convertible Securities and;

8.       Loan Syndications

When most people talk about a company raising capital, what usually comes to mind is a private company going public - selling through an initial public offering (IPO) of their stock. An IPO can indeed be an effective means of raising capital for corporate firms as it has many upsides and remains one of the easiest ways to raise business capital.

A look at the performance of IPOs at the global market shows there were already more IPOs in the works this year than at the same time in 2013. Research shows 85 potential deals may raise $25b globally.

In the Nigerian market, firms seem to be embracing other methods of capital raising like special placement, rights issue, Tier 1 & Tier 2 capital and private placements unlike what was in obtainable around 2006 and 2007 when the market witnessed a lot of IPOs.

The table below present a glance of the recent methods firms are embracing in terms financing.

Source: The Analyst

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