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How SEA Companies Can List Their Initial Public Offering on the New York Stock Exchange

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A few years ago, Shopee’s parent company, Sea Group, was one of the first SEA companies to be listed on the New York Stock Exchange (NYSE). Recently, TDCX, a Singapore-based digital customer experience (CX) provider announced that it has on the New York Stock Exchange as well.

Closer to home, MoneyLion’s Foong Chee Mun became the first Malaysian fintech founder to get an initial public offering on the New York Stock Exchange. There have also been headlines about Grab, PropertyGuru, and similar tech giants heading toward the same goal.

These success stories have sparked questions from SEA soonicorns (soon to be unicorns) who are also striving to make similar breakthroughs. in a Wild Digital SEA 2021 Laurent Junique, founder and CEO of TDCX, shared his thoughts on how he knew his startup was ready to go public.

He was joined by Andy Tai, the Managing Director of Goldman sachsand Delano Musafer, NYSE Head of Capital Markets at APAC, the team that helped TDCX go public.

Moderated by Kit Wong, CFO of Catcha Group, the discussion shed light on the benchmarks required of SEA startups to obtain their IPO listing. The panelists also explored areas of consideration that companies should consider before doing so.

But what good is the NYSE?

The NYSE is known to be one of the “gold standards” for companies around the world to go public. Aside from its prestige, companies that get their IPO are said to have better investment opportunities and greater liquidity, according to Delano.

Furthermore, the New York Stock Exchange is also unique in that it has human market makers on the ground who are assigned to guard the stocks of some companies. They should even commit their own capital to back the stocks of their businesses, so investors and issuers have more confidence in their stocks.

This incentivizes market makers to ensure that their assigned companies are performing well.

Kit added her two cents: “For what it’s worth, Catcha Group is also listed on the New York Stock Exchange and part of that is due to the human element of market making, having someone to talk to makes a difference.”

How to know that your company is ready to quote

Become a unicorn

Laurent started the discussion with his experience on how he knew TDCX was ready for its IPO. Having grown from 13,000 to 14,000 employees over 26 years, TDCX has gone from delivering its Customer Experience (CX) solutions to just customers within Singapore to others across the SEA.

Soon after, the team realized the potential for TDCX to also capture the global market, prompting Laurent to make the decision to bring TDCX to the public market.

Andy presented his points from a market capitalization perspective, stating that the general rule of thumb for a company to know that it is ready to go public is to achieve unicorn status first. Having a market capitalization of at least $ 1 billion is helpful because it shows that a company is of a scale that investors would be interested in.

“By then, you’re too big for investors to not look at you,” Andy said.

Delano agreed, but revealed that NYSE listing standards only require a minimum market capitalization of $ 200 million to receive an IPO, but achieving unicorn status is advantageous.

Know your market fit

While IPOs are generally agnostic about the types of publicly traded companies, Andy emphasized the importance of companies knowing their fully accessible markets and plans to grow from there. But first, a company must take a step back to review what their business is about and find out how they can serve the market, nationally or internationally.

To illustrate his point, he pointed to the success of the Indonesian market, Bukalapak, which was on the list nationwide on the Indonesian Stock Exchange. He said the company had a very strong understanding of its local market, as reflected in its brand and internal systems.

Laurent chimed in with his experience on the ground. When choosing which exchange TDCX was to be listed on, they were advised to look at which markets had the most industry pairs in their sector, and they found it in the US.

However, having more peers in the industry meant more competition, which meant that TDCX needed to differentiate its history and offerings to stand out.

“As we came from SEA, a high growth region, we had a unique proposition for investors. Now we don’t just choose the US, we choose the New York Stock Exchange as we believe it is important to have an exchange driven by business support, which was spectacular there, ”shared Laurent.

TDCX was also informed that the NYSE was a market that was also more liquid, and obtaining an initial public offering there would give the company access to global investors.

“To give a number, the NYSE is trading around $ 150 billion every day, so that’s a lot of liquidity,” Delano added.

Have a solid business track record after going public

The panelists noted that companies seeking to go public must also shape their business trajectories. This includes the company’s future fundraising plans that relate to the liquidity point of view of the exchanges.

Laurent could relate to this, recalling that TDCX actually postponed its listing when the pandemic hit in 2020. This was because the team did not have enough visibility into the future of how the company would be operating during the pandemic or in the new normal. . .

“We wanted to be better positioned to explain our story to investors. We didn’t want to be in a position where we didn’t know what to do, ”he said.

“He wants to be confident and to be able to project where the company is going in the coming quarters. You want to do your best. “

Preparing to go public

Get your paperwork in order

In Andy’s experience, companies generally underestimate the amount of effort and time required for a company to go public. He also explained that the beginning of the listing process implies the hiring of bankers, accountants and lawyers to initiate the audit and the presentation of the necessary documents.

This process generally takes 6 to 8 months before something else can happen, such as marketing the company to investors.

Andy advised companies looking for a list to start thinking ahead and get their documents, such as financial statements and other documentation, in order, before even hiring the necessary professionals.

“Be aware of the auditing standards that you will be subject to because US and national exchanges have very different accounting standards,” he added.

Prepare your team

Another thing that a company must resolve in addition to paperwork is its internal corporate governance. The team must be mature enough and aware of additional work beyond their daily work.

There is a lot of work and commitment, not only when it comes to going public, but also for the future as a public company, said Laurent.

Be prepared for public scrutiny

Laurent shared that one of the main differences between being a publicly traded company and a private one is the increased public scrutiny it is now subject to. As the company will now have to report its financial performance and projections every quarter, there will be an increase in administrative tasks, earnings reporting, etc.

I look at it from the perspective of becoming an adult and it is a good effort for a company to be more structured, more organized and more transparent to pave the way for future growth. It also reminds us that the IPO is not the end of the journey, it is the beginning.

Laurent Junique, Founder and CEO of TDCX

If you’re not ready for the amount of work, don’t force an IPO unnecessarily

That was according to the speakers, who said there is not exactly a “bad time” to go public per se. However, poor results can occur if a company and its team are not mature enough or are not prepared for the amount of effort involved in being included in an exchange.

Some of these examples may range from a company that is listed without an earnings report, or that does not achieve intended results and remains stagnant.

This certainly points to the fact that companies looking to go public must have a very solid understanding of their business, how it fits into the market, backed by a strong and united team.

“That’s why I insist on the fact that companies should think about preparing for an IPO much earlier, because those key areas take a long time to develop,” Andy concluded.

  • You can learn more about Wild Digital here.
  • You can read more about what we have written about Wild Digital SEA here.

Featured Image Credit: Laurent Junique, Founder and CEO of TDCX / Delano Musafer, Director of Capital Markets at APAC on NYSE / Andy Tai, Managing Director, Goldman Sachs

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