skip to content

New Issues/IPOs

An Initial Public Offering/Flotation/New Issue is simply the first sale of shares in a company, usually to institutions like private equity houses, asset managers and pension funds. In some cases individuals can apply for shares directly at a fixed price. New Issues also occur when a quoted company issues additional shares.

Register your interest in New Issues and IPOs

What are New Issues and IPOs?

A New Issue or an IPO (Initial Public Offering) is a method of bringing a company to the market to raise money in return for a transfer of control to shareholders. There are many reasons why companies offer shares to the public including to raise new capital, widen their shareholder base, gain a stock market quote for liquidity, use 'paper' to make acquisitions or simply to raise their public profile.

It is not always possible for the retail investor to participate in New Issues or IPOs as the EU Prospectus Directive dictates that in order to offer shares to the public, the company must issue a prospectus approved by the Financial Conduct Authority (FCA). This can be costly and as a result some companies choose not to issue a prospectus and offer shares to professional investors and institutions only.

What are the benefits?

  • Shares are often attractively priced to appeal to investors; the underwriters will look to get a good price for the underlying owner but investors can usually expect to acquire shares at a discount to the market value, providing an early opportunity to invest in a growing company.
  • New issues are exempt from stamp duty.
  • High demand may lead to new issues being oversubscribed which in turn is likely to see good demand in the market once the shares are trading freely, resulting in the share price being pushed upwards.
  • The issuing company may also include some additional perks for 'founding shareholders' e.g. discounts on their goods/services.

What are the risks?

  • Where an issue is very popular it is likely applications will have to be 'scaled back'. The issuers will consider how best to distribute shares in the interest of all applicants.
  • Ahead of an issue there can be a lack of independent historical detail about the company. It is advisable to access the prospectus made available during the offer period and also research general press comment. You can also contact your local branch or call on 0800 496 5606 to discuss.

« Back to New Issues & IPOs

Info Point

Register Now

Register your interest in forthcoming IPOs or new issues.

Contact us

To discuss further please contact your usual Redmayne-Bentley contact, for details visit our branch pages. Alternatively contact Investment Support on 0113 200 6560.