The Securities and Exchange Commission (SEC), Nigeria Stock Exchange, Central Securities and Clearing System, and six other organisations have come together under a committee to ponder the modalities involved in issuing Electronic Initial Public Offers (e-IPOs) in the country.
e-IPOs facilitate online offerings of a private company’s stock to the public. According to the Central Depository Company, e-IPOs provide an efficient, easy and hassle-free mechanism for making applications for subscription of stocks of companies offered for sale.
The SEC Acting Director General, Mary Uduk says that the Nigerian capital market cannot afford to be left behind as capital markets are moving towards e-IPOs.
According to Nigeria Communications Week, the committee will also look into the rising trend of delisting by some public companies, as it poses a threat to the growth and development of the market.
It appears that good times are coming for investors and potential investors as well as listed companies on the capital market as the considered model would allow investors to apply for subscription of securities electronically, saving them time and effort.
e-IPOs also have the potential to expand the outreach of IPOs through a web-based portal that’s available 24 hours a day, 7 days a week. It also allows instant handling of public offerings via an automated system. As an investor, you get to track your order status and also modify your bids online.
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Nigerian startups raised $377m in 2019, more than twice what they did in 2018. Find out more when you download the full report.