When a portion of an initial public offering (IPO) is placed with private investors right before the IPO is scheduled to hit the market. Typically, these private investors in a pre-IPO placement are large private equity or hedge funds that are willing to buy a large stake in the company. The size of the investment means the price paid for shares in a pre-IPO placement is usually less than the prospective IPO price.
It may seem like these private equity and hedge funds would be able to turn around and sell the shares at a higher price right away, but generally there is a lock-in period attached to the placement. This lock-in period prevents the funds from selling the shares in the short-term and tends to help attract investors who are looking to invest in the company for the long-term.
Raise capital before you go public
CIG Group India specializes in pre-IPO financing, for companies that want to raise capital and strengthen their financial position before conducting an IPO, thus achieving a higher IPO valuation.
Our strength lies in our ability to assist good companies to raise capital in a pre-IPO private placement offering, typically via a preferred stock offering to institutional investors, and followed by an IPO on a recognized stock exchange when the company is ready.
A pre-IPO offering also allows the company to cover the costs and fees associated with a planned IPO from the proceeds of the pre-IPO capital raise, thus alleviating much of the up-front costs associated with an IPO.
Depending on the quality and unique characteristics of your company, we can help you to structure the best private equity financing for your company. We are always looking for high quality companies that meet our requirements.