Public subscription offering (OPS)

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The public subscription offering (OPS) is a procedure through which a qualified investor or retailer buys public securities of a company or society.

To carry out a public offer of subscription of securities, it is necessary for the company to carry out a capital increase, in which one, several, or all of the shareholders renounce the pre-emptive subscription right, and to issue new shares before selling them in the bag. In this case, the selling company will maintain its shareholder structure to admit new ones, with the aim of placing them on the Stock Market. In general, a OPS has more reputation than a Public Offering of Sale (IPO), since current shareholders do not want to leave the company but rather the company has growth plans and needs money to finance its investment projects.

The price is set throughout the subscription period, and may be referenced to a maximum price or to a price band.

Tranches in public subscription offerings (OPS)

The different sections are usually offered to three main categories:

  • Retail sector.
  • Institutional sector.
  • Employees.

A section is usually reserved for what is called “Green shoe”, Whose purpose is to attend to excess supply and demand of the institutional section, trying to stabilize the value of the share.

Entities that participate in the placement process

  • Global coordinators: They coordinate the offer in all its sections, its distribution and setting the final price.
  • Directors: They participate in the management and preparation of the offer and assume an assurance commitment.
  • Insurers: They assume the commitment to guarantee the economic result of the operation against the risk of placement.
  • Underwriters: Intermediate in the placement of shares among the public with or without underwriting commitment.

When launching a PAHO, it is necessary to publish an information brochure before the regulatory body or the National Stock Exchange Commission and this financial event must be publicized. Generally, it is usually done through the company's website or on the Commission's website in the relevant facts section.

However, the road show It is one of the best known forms of marketing. This is a presentation of a securities issuer to potential buyers, where you travel across the country to give presentations to analysts, fund managers and potential investors. The road show It is intended to generate excitement and interest in the topic or IPO, and is often critical to the success of the offering.

PAHO Information Brochure

The information brochure in a PAHO should be addressed to the public and will contain the following information:

  1. Information regarding the securities they offer. Its nature and characteristics, including price and expected profitability.
  2. Details about the issuer: registered office, date of incorporation, administrative body.
  3. Information regarding the issuer's activity, including its assets, current situation, results and prospects.
  4. Detailed description of the placement: placement entities, terms, award system, etc.
  5. On the tax regime applicable to the securities issued.

The issuance of an OPS tells us that society intends to make changes and this should be studied with caution. Not all changes are good, although they generally are. Therefore, we must study some variables such as the company's dividend policy, the return on assets, whether they are fixed-income securities such as promissory notes or obligations, and of course, the liquidity of the stock, as well as the macroeconomic and sectoral environment. that will affect the company.

In an OPS, as in an IPO, the company or society will make an assessment of the starting price in its placement. If the company detects that there is not enough demand, it could lower that price and could even suspend it.

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