Corporate Finance Advisory

IPO Advisory Services

An initial public offering (IPO) can be a complex and challenging process, but it is one of the most valuable opportunities for companies to raise capital, improve their reputation and credibility, and allows companies and shareholders alike to gain tax-exempt dividends from investment. It is crucial for a company intending to go public to understand the steps involved in conducting an IPO on the Thai Stock Exchange.

Opening a company to the public market allows it to tap into a vast pool of potential investors and secure the capital it needs to fuel the company’s growth and success.

Table 1: Company benefits of going public
Company benefit
Why
Sustainable Funding Source

• A company can sell shares to a wide range of investors in or outside Thailand.
• The IPO selling price is normally higher than par value with no debt servicing
(interest) costs
• The company can issue and list securities beyond common shares, such as
debentures, warrants, and preferred shares, which will raise additional capItal.

Tax Privileges on Dividends

• If a company is incorporated under Thai Law, any dividends received from
holding shares in other Thai firms are tax-exempt. Stocks must be held for a
minimum of three months before and after the date of the dividend
payment.

Better Reputation and Credibility

• Company disclosure of financial information to the public is viewed as more
credible and trustworthy.
• The strict regulations and increased transparency lead to a better
reputation, more credibility and higher bargaining power.
• Increased exposure through official SET channels publishing company
information. This can help attract customers, partners, and potential employees.

Business Network

• A public company status draws in foreign investment and creates opportunities
to expand and modernize.
• Having a tactical business ally such as the SET increases a company’s
competitiveness, especially on a global scale.

Employee Morale

• Listed companies can access financial instruments like the
Employee Joint Investment Program (EJIP) and the
Employee Stock Ownership Plan (ESOP) to help attract and retain employees.
• Public listing brings public respect, which fosters employee pride and loyalty.

Table 2: Shareholder benefits of going public
Shareholders’ benefit
Why
Enhanced Liquidity

It is easier to trade stocks for cash on the public market.

Shareholder
Protection

Rules and regulations governing securities trading and information disclosure ensure shareholders’ investments are protected.

Tax Benefits

Individual investors selling shares in a company listed on the Thai Stock Exchange are not required to pay tax on the capital gains earned from the sale.

Main Stock Exchanges

Thailand has two exchanges: the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI). While the application regulations for the SET and MAI are the same, their specific listing requirements are different.Thailand has one of the most liquid markets in Asia, which is crucial for a company considering listing; higher liquidity makes it easier for buyers and sellers to trade. The SET ranks first in the Association of Southeast Asian Nations (ASEAN) for trading liquidity.

The SET

The Stock Exchange of Thailand (SET) is the country’s main stock exchange. It is responsible for processing all listing applications, ensuring that listed companies meet disclosure requirements, and monitoring trading activity. The SET tends to attract large companies as well as a broader range of industries, such as the automotive, technology and digital industries. It offers a range of securities, including shares, warrants, and investment units.For domestic entities, the specific listing requirements differ depending on whether the company is a a) general business; b) basic utilities business; or c) holding company. For foreign entities, the requirements differ depending on whether they are applying for a primary or secondary listing. All entities, regardless of whether domestic or foreign, must list under one of the eight industry groups and twenty-eight sectors.

The MAI

With its less rigorous requirements – such as a lower paid-up capital requirement and a lower number of required shareholders – the market for alternative investment (MAI) tends to attract small and medium-sized companies. It allows start-ups and innovative businesses with high growth potential to access broader fundraising opportunities as it draws in venture capitalists.

How Can We Help?

At MPG, we are a key partner throughout the offering process. Our legal team will advise clients on possible IPO restrictions arising from contract, and assist in ensuring compliance with relevant laws and regulations governing the process. Additionally, our lawyers are generally involved in drafting the registration statement and prospectus. We also assist with financial advisory services, which include:
‎ ‎ ‎ ● Conducting due diligence;
‎ ‎ ‎ ● Establishing standard internal control systems;
‎ ‎ ‎ ● Restructuring the company as needed, including business, equity and shareholding
structures;
‎ ‎ ‎ ● Preparing documents and information for the IPO filing and listing application; and
‎ ‎ ‎ ● Distributing securities or employing an underwriter to distribute securities.

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