IPO (Initial Public Offering - not only creates opportunities to raise capital and strengthen brand positioning, but also comes with a host of new obligations and pressures. Becoming a publicly listed company means that the enterprise must comply with strict standards of governance, transparency, and legal compliance.
So, what are the biggest challenges companies, need to prepare for when entering the listing process?
Businesses face many challenges after IPO
Key Challenges in an IPO
1. Disclosure obligations
Beyond strategic benefits, IPO IPOs impose a wide range of new requirements. The foremost is transparent disclosure in line with public company standards: financial statements, executive compensation, key contracts, and other material information. While this enhances credibility with long-term strategic investorst can also expose sensitive data to competitors, customers, and suppliers.
2. Compliance costs and obligations
Listed companies must shoulder ongoing costs to maintain public company standards, including hiring independent auditors, operating a governance system with independent board members, and submitting periodic reports to regulators. These are recurring annual expenses—on top of communication and investor relations costs to maintain shareholder confidence and market visibility.
3. Market Pressure
Once listed challenges companiesbusiness performance comes under close scrutiny from shareholders and the market. The Vietnamese capital market requires companies to sustain stable growth strategies and report results regularly, creating significant pressure on management. In many cases, this pressure can lead businesses to prioritize short-term performance over long-term competitive advantage.
4. Restrictions on Share Sales
After an IPOfull disposal of shares is usually restricted by law and market practices. The lock-up period and gradual divestment process may take years. If market valuations do not outperform large-scale private M&A transactions, selling to strategic investors can be a more effective way to achieve liquidity quickly.
5. IPOs Are Not Optimal for Every Business
Not all companies are suitable for listing. Some adopt a dual-track process (dual-track process) - pursuing an IPO quy trình IPO while simultaneously seeking acquisition offers. —to maximize options and negotiating leverage. Many companies progress far into the listing process challenges companies but ultimately opt for private sales due to more favorable conditions.
Private companies enjoy notable advantages: confidentiality of financial statements, no obligation to disclose executive compensation, lower compliance costs, and greater strategic flexibility. Moreover, they can execute large M&A deals without requiring audited reporting, preserving both speed and confidentiality.
Choosing a Trusted Advisory Partner
IPO An IPO is a major opportunity but also a long-term commitment to shareholders and the market. Companies need thorough preparation in legal, financial, governance, and IPO strategy to minimize risks and maximize benefits.
With expertise in financial and legal advisory , IVLF provides tailored IPO solutions from capital structure planning and documentation preparation, to governance readiness and market communication. Our goal is to ensure a successful listing while helping enterprises maintain sustainable performance over long-term competitive advantage in Vietnam’s capital markets..
Contact information
IVLF Advisors LLC
Hanoi Office
📍 R1.7 Eden Rose Urban Area, 908 Kim Giang Street, Thanh Liet Ward, Hanoi
📞 (+84) 936 726 065
✉️ info@ivlf-advisors.com
Ho Chi Minh Office
📍 4/17, HT02 Street, Tan Thoi Hiep Ward, Ho Chi Minh City
📞 (+84) 936 726 065
✉️ info@ivlf-advisors.com
