The Initial Public offering (IPO) is a mechanism by which company offers to sell its shares to public in order to raise funds to finance their future growth and expand their business activity. Doing an IPO is referred to as “going public”, as it allows the company to get listed on any favorable exchange and raise capital from public. Going public ensures that companies fulfil all the regulatory and compliance requirements of the exchange and a successful IPO will provide a company its true valuation, good public image and low cost of borrowing. IPO Process: The IPO can be offered to public either on fixed price or book building mechanism where the investors submit a bid at a specific price in a price band and stating the total number of shares they wish to purchase. Such information gets recorded in a book and ascertain the market demand of the security to finally derive the offer price, the highest bidders get securities on the offer price. The management has to select the underwriters and investment bankers for this process. Underwriters also provide financial and procedural advice starting from legal issues, deciding the price and finally selling the shares to the public. In today’s world, business operations and capital flows are becoming increasingly globalized and the market leading companies are trying to access public capital in foreign market. Global stock exchanges are also working hard to pursue new listings from abroad and accessing foreign markets. A company’s choice of an exchange is a long term strategic decision and should depend upon the following factors: • Exchange prestige, Listing cost, regulatory requirements, technology and stock market performance. • Quality of the exchanges’ institutional investors and their understanding of the business. • Visibility to customers and suppliers and the number of peer companies trading on the market. • Likelihood of attracting the research coverage. If a company’s choice of an exchange doesn’t have a clear connection to its own business and doesn’t makes sense to investors, its valuation will likely be reduced. Below are some major stock exchanges and their strategic focus: Australian Securities Exchange: It has dominance in Australian market and also encourage listings mostly from Southeast Asia mainly due to low listings cost and strong performance. It charges low for SME transactions whereas keeps high price for larger company transactions. Deutsche Borse Exchange: It differentiates itself from rest of the exchanges through services portfolio that covers the entire process chain, including services and derivatives trading. The process oriented business model strives to increase efficiency of capital markets, low capital and transaction costs. Euronext: It has cross-membership arrangements with the Luxembourg, SWIX swiss and Warsaw exchange. It uses the French fully electronic share trading system and provides the most preferred location for French privatization. It has a strategy of diversification and expansion. NYSE and Euronext merger provided increased liquidity. NYSE: It is the global leader among world’s major exchanges and provides the market place for the most liquid entities. It has the brand image as the “Gold standard” in terms of listing requirement and the blue chips companies it holds. It covers major time zones and trade in two major currencies (dollars and euros) making it easier to trade securities. Exchange listing standards Stock exchanges generally require that companies must meet certain minimum requirements to qualify for listing. The following list provides such criteria’s which are subject to vary from time to time based upon the exchange’s governing body and also to ensure that quality of exchange is maintained and it functions efficiently. • Income, Revenue and/or profits • Floatation and market capitalization • Operating history • Working Capital and/or assets • Number of shareholders and/or share distribution To conclude, the world’s top exchanges are vying for the most valuable listings abroad and thus the exchanges are becoming very competitive and actively deploying new technologies and strategies to win greater market share than others. Although the business prefer to get listed on the exchanges of their home countries, they are becoming open to raising funds from foreign markets which best suits their needs and provide less transaction costs.