I had recently done a small study for a client and am sharing some of the findings from that on this blog, without infringing the contract obviously. I think it could be of interest to some of you.
The work tries to answer one simple question: How much would it cost a company if it were to move public via an IPO?
There’s no perfect answer to this.
Based on the data gathered from nearly 20 companies’ that went for an IPO this year, the cost could vary anything between 4% to 13% of the money raised. One can try to see this in the following format as well.
Slab x: Money Raised in cr: Cost %
Slab 1: Less than 100cr: 10%
Slab 2: 100cr to 200cr: 7.5%
Slab 3: 200cr to 500cr: 5.0%
Slab 4: 500cr and above: 4.0%
Cost or Issue Expenses are usually in the form of: Fee to BRLM; Marketing, Printing charges; Fee to SEBI/NSE/BSE; Fee to Legal Counsel; Fee for IPO Grading; Registrar charges; and Misc. expenses.
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