Initial public offering is the first public sale of shares of a private company including through the sale of Depositary receipts for shares. The sale of shares may be effected as by placing additional shares through public subscription and by public sale of shares of an existing issue the shareholders of a private company.

The main stages of the IPO (according to the method of formation of the order book). The process of issue of shares can be divided into six stages. Specific details and timing of the different stages may vary but the structure of the process remains constant.

Long-term preparation for the company's IPO.
About two years before entering the public market the company must begin to meet the basic requirements of public companies to develop a business plan and regularly prepare financial statements.

The formation of a team for the IPO and the General meeting.
At this stage the company needs to choose a leading investment Ban law firm and auditor. Investment Bank will act as the key adviser to the Issuer and to carry out the functions of the underwriter. Six to eight weeks before the official registration in the Commission on securities the General meeting at which the plan-the schedule of IPO and the responsibilities are allocated to team members. The IPO process officially begins with the General meeting.

The development of the prospectus.
The preliminary prospectus is the main marketing tool and should contain all necessary information to investors about the company. As a rule it includes the financial statements for the last five years, a description of the target company's market, competitors, development strategy, management team, etc. Simultaneously the underwriters begin to study the activities of the company a thorough analysis of all the information that will be included or referred to in "comfort letters of the auditors and legal advisers, addressed to the underwriter. A preliminary version of the prospectus is printed and submitted for verification to the securities Commission. Senior underwriter selects syndicate investment which will help to distribute the company's shares among investors. The preliminary prospectus is distributed to institutional investors.

"Road shows".
At the same time begins the "road show" (Road Show) i.e. visits to meetings of investors in various cities and a presentation of the company large investors (funds, insurance companies, banks, individuals). The purpose of this event is to convince potential investors to buy stock in the company. Its duration is three to four weeks and includes two meetings per day of the company's management with investors. This is the most important part of preparing to market. In the course of the road show the underwriters begin to form in the bid book. At the end of the road show company management meets with investment bankers to agree upon the final production volume and stock price ("offer price"). Price and volume are chosen depending on the expected demand for the company's shares. After approval of the final cost proposal and the size of the issue, printed the final version of the prospectus and price amendment (Рrice Аmendment). Further if it is approved begins the distribution of shares among investors.

Start trading shares in the company.
After agreeing on the price of shares and no earlier than two days after the release of the final version of the prospectus the company announced the introduction of the IPO in force (usually after close of trading). A certain number of shares of the company distributed among the members of the investment syndicate brokers and their clients. Trade of company's shares on the stock exchange starts the day after the announcement of the IPO. Senior underwriter is responsible for the smooth organization of trade and ensure price stabilization of the company's shares.

Completion of the transaction.
Deal underwriting (activities of investment intermediaries to guarantee the issue of securities in the primary market) is considered complete when the company transfers its shares to the underwriter and he takes the money to the account of the company (usually three days). Seven days after the debut of the company's IPO is declared valid. 25 days since the trade ends in the so-called "period of silence". Only at the end of this period the underwriter and other members of the syndicate may make public predictions and determine the value of the company and also give recommendations to investors concerning purchase of shares of the company.