Why should companies invest in PR for their IPO?
IPO or Initial Public Offering is the new buzzword that is going on in the Indian business fraternity thanks to Zomato and a few other unicorns who are contemplating doing something similar. Though with the association of startups the term IPO has become a trendy concept in reality it is far from trendy. From making a big transition from being a public listed company to getting only one chance of doing things right; there’s a lot at stake for the company that is planning its’ IPO. So to make the most of the situation it is pivotal that companies utilize the power of communication to elevate brand awareness, increase credibility and create top-of-mind recall among investors, analysts and the general public.
Anindita Gupta, Co-Founder, Scenic Communication highlights 3 points that elucidate the importance of PR for a company’s IPO:
Pre IPO awareness is of paramount importance: Once an announcement is announced, companies come under a lot of scrutiny in what they send out to the media and their audience in general and it becomes difficult to create awareness. So it is important to have a robust PR strategy that will ensure brand awareness well before IPO plans are in place, without which the share price and overall valuation are definitely going to be impacted which no company wants to witness. If we take the example of previous IPO’s, the valuation of companies that were known and had a favorable brand awareness was much higher compared to the rest. Pre-IPO media outreach if done effectively creates the right degree of buzz in the market.
A companies’ messaging will ensure proper valuation: IPOs are not just about financial transactions. They are also about creating and maintaining a brand message that people can resonate with. A well-planned campaign can positively impact market perceptions, which is vital for a company planning for its IPO. Targeted messaging by bringing to notice the companies’ core competencies and business plan can help a company get into the notice of genuine investors and will ensure the company garners an appropriate valuation. Also being able to clearly demarcate the USPs and make the media, investors and general audience understand the nuances of the business will help avoid confusion and increase valuation.
Visibility will ensure media presence even during and after the IPO: A successful IPO just does not stop at building awareness and ensuring proper messaging. It is also about maintaining constant visibility in the media through various PR tools much before the IPO commences. The benefit of this activity is multi-fold. This will ensure top-of-mind recall in the media and when the IPO is slated, there are much higher chances of the media responding well and covering the IPO in full force. Proactive media efforts such as interview, thought leadership articles, and press releases will help build and maintain relationships with media houses which will come in handy during the IPO. A well-planned PR effort for a successful IPO needs to start at least a few months before a company plans to launch its IPO using various PR tools available. This will ensure the right attention and quality for a successful IPO and set the right tone for public trading.