What are the IPO Criteria?
CMB updates the IPO criteria based on financial performance at the end of each year. In 2024
Public Offering Consultancy
PUBLIC ARZ
Rota Capital takes part in and manages the entire IPO process.
Public offerings offer significant returns and advantages for businesses. Necessary liquidity is provided, capital increases and financing is obtained for new investments. An IPO allows the company to raise a large amount of capital. This capital can be used to finance the company's growth projects, strengthen working capital, pay off debts or make new investments. The IPO process allows the company to be recognized by the public. In this process, marketing and promotional activities through the company and news channels increase the recognition and brand value of the company. An IPO raises the company's corporate governance and transparency standards. Being a publicly traded company requires being subject to the supervision of regulatory authorities, which leads to a more disciplined and transparent management approach.
public offering processes
The IPO process for companies preparing for an IPO is analyzed under five main headings.
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Phase OnePreparation
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SECOND STAGETransition to Registered Capital System
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PHASE THREEProspectus Preparation
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PHASE FOURPublic Offering Application
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PHASE FIVEAfter IPO
Actors
Who are the Actors Involved in IPOs?
CMB
Borsa Istanbul
Company Management
Company Accounting Department
Intermediary Institution
Independent Auditor
Independent Lawyer
Asset Valuation Company
Ministry of Trade
What are Rota Capital's Tasks in the IPO Process?
For a successful IPO, it is important that the company's relations with these actors, information exchange traffic and the services to be received from third parties are well managed and controlled. Rota Capital takes part in and manages all of these processes.
Preparation
Rota Capital's Tasks in the IPO Preparation Process
The functioning of the financial records is examined on the basis of all account items in accordance with the financial legislation, the records are improved with the necessary corrections and adjustments, and they are made ready and suitable for independent audit. In addition to this, the following issues are also examined and the arrangements and changes deemed necessary to be made prior to the public offering are carried out in accordance with the procedure and relevant legislation;
- Partnership structure and shareholders.
- Related parties, associates and subsidiaries.
- Mergers and divisions.
- Assets of the company and its shareholders, asset movements.
- Capital structure of the company, capital changes.
- Articles of Association of the Company.
- Realized general assemblies of the company and resolutions of the board of directors.
- The company's activities.
- Financial management of the company.
- The company's accounting records.
Within the scope of preparation for public offering;
An IPO working group is established and its activities are managed.
Regular meetings are held at frequent intervals with the company management and the working group.
During the quarterly accounting periods, the company's accounting department, financial advisor and CPA work together, balance sheets are audited in accordance with financial legislation, TFRS and CMB practices, and the accounting periods are closed by taking Rota Capital's warnings, opinions and suggestions into consideration.
General assemblies that need to be held are organized and minutes are prepared by Rota Capital.
Board decisions are reviewed before they are taken.
Important investment decisions and financing of investments are examined.
The purchase and sale of significant assets is scrutinized.
Pending or potential lawsuits of the company are examined and their impact on the IPO process is analyzed.
In each accounting period, company valuation is performed in accordance with IAS (International Valuation Standards) and CMB regulations and changes in company value are monitored.
third parties
How does Rota Capital Manage Services from Third Parties?
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Phase one
Preparation
During the public offering process, reports to be obtained from authorized third parties such as 'Independent audit report, valuation reports of tangible fixed assets and independent lawyer's report' are prepared. -
Second phase
Control
Rota Capital requests draft reports from the preparers, checks them on behalf of the company, identifies possible errors, and recommends corrections and adjustments as deemed necessary. -
third stageRegulation
Matters identified in the reports that can be corrected or changed by the Company are corrected before the reports are approved.
kss
What is Transition to the Registered Capital System?
Companies that have switched to the registered capital system before the public offering may realize capital increases with a value below or above the nominal value only by the decision of the board of directors without the regulation of the general assembly, provided that it does not exceed the determined capital ceiling.
How is the Authorized Capital Ceiling Determined?
Companies may set a capital ceiling up to five times their paid-in capital or the shareholders' equity in their most recent TFRS-compliant financial statements (as stated in the independent audit report) at the stage of application for transition to the CSR. Companies wishing to switch to the authorized capital system must have fully paid-in existing capital.
authorized capital ceiling
How many years is the authorized capital ceiling valid?
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Companies that adopt the registered capital system may increase their capital up to their capital ceilings at the discretion of the board of directors for a period of five years. -
If the five-year period expires, an application must be made to the CMB for an extension.
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Rota Capital manages all stages of the registered capital system time extension applications.
Preparation
Rota Capital's Tasks in the Transition to the Registered Capital System
Rota Capital manages the entire CSR transition process from the preparation of the amendment text of the Articles of Association and application files to the response of the CMB's information-correction-amendment requests and registration procedures for the purpose of transition to the Registered Capital System by bringing the Articles of Association of the Company into compliance with the provisions of the Capital Markets Law and the Turkish Commercial Code. In this process, the company does not need to receive support from any other third party/organization, including intermediary institutions and legal consultancy. The process proceeds entirely under the management of Rota Capital as stated below;
- The Application Form and other application documents describing the company, its financial structure and activities are prepared by Rota Capital.
- The questions that CMB experts will ask while examining the company are answered and the information, documents and tables they will request are prepared.
- All correspondence with the CMB is carried out by Rota Capital through the corporate e-mail of the company to be offered to the public, which is made available to Rota Capital. This way, erroneous correspondence and information transfers are prevented.
- Prior to the amendment of the articles of association for the purpose of transition to CSR, necessary amendments and arrangements are made to the existing articles of association.
- The amendment text of the Articles of Association, which must be amended and approved by the CMB in order to comply with the provisions of the Capital Markets Law, is prepared by Rota Capital.
- After the CSR transition is approved by the CMB, the Ministry of Trade application documents are prepared and the application is managed.
- Realized general assemblies of the company and resolutions of the board of directors.
- After the approval of the Ministry of Trade, the general assembly is organized.
- CSR transition registration application is realized.
intermediary institution
How to Select/Agreement with an Intermediary Institution?
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Phase one
Intermediary Institution
Brokerage houses are institutions authorized by the CMB to prepare the company's IPO prospectus, determine the share value and sell the shares to investors. -
Second phase
Intermediary Institution Selection
Rota Capital negotiates with suitable intermediary institutions on behalf of the company, taking into account the size of the public offering and the method of public offering. -
third stage
Agreement
Among the brokerage houses that can prepare the files at the required speed and discipline and have sufficient portfolio at the point of sale of shares, the company management is brought together with the ones that are closest to the expectations of the company and a brokerage agreement that best suits the interests of the company is made.
intermediary institution
What is the Balance Due Condition?
For public offerings below TRY 1 billion 200 million to be made in 2025, intermediary institutions guarantee the sale of the first TRY 600 million and half of the second TRY 600 million. With this obligation, called the balance underwriting condition, intermediary institutions undertake to purchase all of the shares that cannot be sold in the public offering. Public offerings above 1 billion 200 million liras do not have this obligation. Brokerage houses provide best efforts intermediary services in public offerings above 1 billion 200 million liras.
The balance underwriting requirement is determined and updated by the CMB.
spk application
Public Offering CMB Application Process
Rota Capital works together with the intermediary institution during the preparation of all application documents including the prospectus to be issued by the intermediary institution that will intermediate the public offering of the shares, preparation of the information, documents and tables to be requested by the CMB after the application, and answering the questions to be directed by the CMB to analyze the company and the financial structure of the company. In this context;
- Carries out all information-document flow between the intermediary institution and the company, examines the information-document-tables to be prepared by the company, makes suggestions for changes and regulations, and prepares them personally if necessary.
- Prepares all or part of the prospectus and application documents as determined together with the intermediary institution.
- Shares the prepared sections with the intermediary institution and applies the necessary corrections and adjustments.
- It examines the prospectus sections and application documents prepared by the intermediary institution, and conveys the corrections and editing suggestions it deems necessary to the intermediary institution.
- The CMB responds to questions received during CMB examinations in consultation with the company and the intermediary institution.
- Prepares the information-documents requested in CMB examinations in consultation with the company and the intermediary institution.
- During the on-site examinations of CMB experts, he/she is present at the company during the entire examination and organizes the company's public offering working group during the examinations.
- Conducts negotiations on behalf of the company before the CMB and manages relations.
- After the prospectus is approved by the CMB, it prepares the required documents in liaison with the intermediary institution and manages the CRA-KAP application processes.
- Participates in company promotional activities such as press conferences and interviews, if necessary.
Public Offering Stock Exchange Application Process
Rota Capital manages the entire process of preparing all application documents to be submitted to Borsa Istanbul, preparing the information, documents and tables to be requested by BIST after the application, and answering the questions to be addressed on behalf of the company. In this context;
Carries out all relations with BIST on behalf of the company as a consultant.
Carries out all information-document flow between the Company and BIST, reviews the information-document-statements to be prepared by the Company, makes amendment-editing proposals, and prepares them personally if necessary.
Responds to questions received during BIST inspections on behalf of the company and prepares additional information-documents requested on behalf of the company.
During the on-site inspections of BIST experts, he/she is present at the company during the entire inspection and organizes the company's IPO working group during the inspections.
price determination report
What is a Price Determination Report?
The Price Determination Report (PRR) is a valuation of the company that determines the value of the shares of the company to be offered to the public. The report is prepared by the intermediary institution intermediating the public offering. In order to ensure that the valuation meets the expectations of the company and is deemed reasonable by the CMB and investors, Rota Capital follows the preparation of the report on behalf of the company and helps to ensure that the value to be obtained accurately expresses the company.
What is the Role of Rota Capital in Determining Company Value?
- Together with the Company, it prepares the future projection of the company, which is the basis for the Discounted Cash Flow (DCF) valuation, in accordance with the DCF methodology.
- Prepares company valuation (FTR valuation tables) together with the intermediary institution.
- If it is prepared separately by the intermediary institution, it examines the prepared FTR and conveys its findings, opinions and suggestions to the intermediary institution on behalf of the company.
post IPO
What Does Rota Capital Do After the IPO?
After the IPO, if requested by the company, Rota Capital continues to provide consultancy services to the company on price stabilization transactions, rights issues, capital increases, compliance of operational-strategic activities and actions with the legislation.
What is the Minimum Capital Required for an IPO?
Although there is no capital requirement for public offerings, the capital is required to be at least 150 million Turkish Liras for the transition to the registered capital system before the public offering.
Parties
Rota Capital from the Parties' Perspective
Company Overview Rota Capital
The person who prepares the company for the public offering and supervises the compliance of all actions of the company with the public offering process, makes recommendations and explains the effects of the actions to the company. In addition, he/she manages the company's relations with the intermediary institution, official authorities and other relevant parties, acts as a bridge between the company and these parties, and prepares application documents and files.
Rota Capital in terms of Intermediary Institution
Prepares the company for the public offering, trains the company personnel, supervises the information-documents to be prepared by the company and assists in the complete and accurate preparation of all application files including the prospectus.
Rota Capital in terms of CMB and BIST
A company consultant who helps to prepare the application files correctly, to transmit information-documents quickly and not to be misleading, and who is knowledgeable about the operation of the process.
Rota Capital from the Independent Auditor, Valuer and Lawyer Perspective
Ensures the healthy flow of data from the company, checks the service they provide on behalf of the company and identifies possible deficiencies and inconsistencies at the preparation stage.
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