Going Public on the QE: Navigating a Path to an IPO and Listing

01 Feb 06:52 AM

Sector : Banking & Finance Country : Qatar

By Robin Butteriss, Mark Lawrie & Hisham Zeitouny

The recent Initial Public Offerings (IPO) of Mesaieed Petrochemical in Qatar and Twitter in the USA might be familiar to people tracking the markets but “going public” is not as easy as it may seem. An IPO and admission to a stock exchange require navigating a path through several layers of legal, regulatory, market and performance requirements coupled with a strong motive to succeed.

The transition to becoming a listed company requires a change in behavior with regard to accountability and disclosure. The affairs of a closely held private or family business are typically kept amongst its stakeholders and the owners may choose to operate their businesses in a personalized manner. However, transitioning to a publicly listed company requires a change in culture and conduct to address the greater accountability and transparency required by a larger pool of public shareholders.

What is an IPO

An IPO is the first sale of a portion of a company’s shares to the public to raise cash for investment. After that, the company lists its shares on a stock exchange and becomes a publicly-traded company. Going through an IPO and listing on Qatar Exchange’s (QE) Main Market, or its Ventures Market (the exchange for small & medium sized enterprises), is a challenging and regimented process. Before embarking on an IPO, companies and shareholders should understand what it means to be listed while considering their current performance and readiness to comply with listing requirements.

Why list

The reasons for going public vary for each company  and  are  largely  driven  by  its shareholders’  circumstances  and  commercial  motives. There are various pros and cons of being a public company. Some of the key advantages are as follows:

  • Raising  cash  through  public  shares can  be  a  relatively cheap  way  to  access  more liquid capital;
  • Healthy separation of ownership and management  through  good  corporate  governance;
  • Listed  companies  carry  prestige  and an enhanced image and brand;
  • Conversion  from  a  family-owned business to a listed company provides more  stability  and  supports  business continuity;
  • Post-IPO and listing, a public company can issue more shares (e.g. rights issues) which may help facilitate mergers and acquisitions in the future; and  
  • Going public requires business enhancement and being more transparent. As companies are open to scrutiny, they are encouraged to perform better.

However, being listed also has its challenges as companies are required to comply with strict ongoing regulations. Some of the challenges of going public may include the additional time, costs and procedures relating to legal, accounting and regulatory requirements which support disclosure and transparency. This also means that competitors, customers and suppliers will have access to the company’s information and family businesses may feel uncomfortable with this new level of scrutiny.

The how

To ensure that a company is in a ‘fit’ condition to address the challenges of being listed requires an assessment of the current state of the company and what is required by the Qatar Financial Markets Authority and QE to satisfy their listing/IPO requirements. In order to complete a successful IPO, some of the key aspects of a company which should be particularly assessed include the following:

1- Financial and legal readiness

In order to list, a business must first have a suitable legal restructure which a holding company and must be able to satisfy QE’s minimum criteria for listing in the relevant market. The criterion (at the time of writing this article) was as follows: 


Main Market

Ventures Market

Subscribed share capital

Minimum 40 million Qatari Riyals (50% paid up)

Minimum 5 million Qatari Riyals (50% paid up)

No. of Shareholders

Minimum 100 shareholders

Minimum 20 shareholders

Track record (trade and financial)

3 years

1 year

Free float

Minimum 20%

Minimum 10%

Disclosure document


Information Memorandum

Listing advisor

Required at submission only

Required at all times

Liquidity provider

Not required


Foreign issuers

Secondary only



Decided by QFMA on a case by case basis

50% of owner’s shares are locked  for 1 year

Source: Qatar Exchange

In addition to these requirements, the business, (which will become a holding company), must be able to satisfy the QFMA of its ability to operate successfully, which means being legally and financially fit for purpose. There are several requirements, but to name the critical ones, the business should have a good financial track record demonstrating a minimum return on capital, a clearly rationalized business plan with supporting strategy and objectives, a dividend policy and appropriate capital structure as well a detailed Prospectus or Information Memorandum.

2- Good governance and reporting

Before listing, companies are required to demonstrate a commitment to, and existence of, a proper governance framework which satisfies the QFMA’s Corporate Governance Code. This includes establishing committees and having clear policies and procedures in place around management duties, role of directors, internal controls, and internal audits, separation of power, distribution of rights and remuneration transparency. After becoming listed, companies are required to prepare an annual corporate governance report signed by the Chairman of the Board of Directors to demonstrate ongoing commitment.

Good corporate governance also involves good internal reporting. Periodic reports on key controls and performance indicators ensure that management and the Board of Directors is well-informed about the affairs of the business and is better placed to take more informed decisions, while following best practices that enhance confidence in the company.

3- Managing the four faces of finance

To become a listed entity, Chief Financial Officers (CFOs) and finance teams will need to execute on a much broader range of responsibilities than their traditional role as corporate accountants. This includes individuals who are linked to the finance function’s effectiveness, quality and consistency of information, talent management, internal controls and business performance management. After becoming a listed entity, CFOs are likely to face further pressures to cut costs, mitigate economic uncertainty and manage investor scrutiny while continuing to grow revenue. This will require the finance function to instill a culture of careful planning with vigorous strategies and diligent execution.

CFOs are therefore expected to play four diverse and challenging roles, particularly in transitioning to a listed company. The two more traditional roles are of “steward,” preserving the assets of the organization by minimizing risk and getting the books right, and “operator,” running a tight finance operation that is efficient and effective. In the post IPO world, it is increasingly important for CFOs to become “strategists,” helping to shape overall strategy and direction, and “catalysts,” instilling a financial approach and mind set throughout the organization to help other parts of the business perform better.


In essence, IPO readiness does not only mean ensuring that regulatory requirements for QFMA are satisfied, but it also involves satisfying the market/investors’ expectations of operating in line with the requirements of being listed. Furthermore, going beyond the minimum IPO requirements no doubt inspire greater confidence from potential investors which may support better market perception and therefore pricing of its traded shares.  


Robin Butteriss
Head of Financial Advisory Services, Qatar
Robin Butteriss leads Deloitte’s Capital Markets Advisory services in Qatar and is also the head of Corporate Finance Advisory services in the Middle East. In Qatar and the GCC, he has advised and is currently advising on the listing/IPO of a number of businesses/groups, as well as advising companies and private equity firms on acquisitions, restructuring, disposals and other advisory services.
Mark Lawrie
Partner, Consulting, Qatar
Mark Lawrie has 16 years experience in the consulting industry and 11 years as a partner in Deloitte Consulting in the UK delivering complex IT, financial management and organizational design projects for clients. Most recently, he has acted as adviser to some of the largest and most complex outsourcing contracts in the UK, and led large teams delivering major cost reduction focused business process transformation projects in a number of public sector bodies
Hisham Zeitouny
Partner, Enterprise Risk Services, Qatar
Hisham Zeitouny is the Partner in charge of our Enterprise Risk Services practice in Qatar. With over 16 years experience in the Middle East, he has assisted various clients with corporate governance, internal audit partnering services, assessing business risks, building internal audit capacity, assessing internal audit departments and reviewing internal control environments. 



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