What goes behind the marketing of an IPO

Thrill, suspense, anxiety, drama are generally words used to describe a perfect movie plot. But these words are also synonymous with a company that is ready to launch its IPO in the market.

Call for entries open for BuzzInContent Awards 2020 ENTER NOW

Years of preparation goes behind the launch of an IPO. Too often, people tend to believe it is more of the finance team's job to take care of the IPO launch, but it's essential to present a well-packaged, gripping story of your brand to differentiate yourself from competition. This is where the marketing team has a key role to play in the pre-IPO build-up.

Angel Broking, the brokerage firm, is all set to shoot its IPO (initial public offering) in the market on September 22. BestMediaInfo.com caught up with Prabhakar Tiwari, Chief Marketing Officer, to understand what goes behind a marketer's mind and all the hard work the marketing team puts in while preparing the IPO to open for subscription.

In many ways, the marketing strategy of an IPO remains the same, i.e., to take the brand to the broader audience base, but there is a slight change in the approach. "Unlike normal brand communication, which is meant for regular consumers, IPO communication is meant for investors. The targeting strategy and the kind of value proposition you talk about are vastly different. It is more a corporate value proposition. One is not trying to sell a service or a scheme, but the entire organisation. Within the marketing guidelines set around IPO, one tries to communicate that the company is financially solid and investing in our IPO would be beneficial for the investors over the long term," said Tiwari.

While the CFO is essential here, one can't overlook the importance of the CMO's role to prepare the company for the IPO. Tiwari says the CMO’s job is equally important as the CFO while going public.

"During IPO preparation, we have gone through the process of getting our anchor investors in place. As part of making the presentation to them, as a CMO, I got an opportunity to share our unique marketing strategy. These arguments are especially important, because fundamentally the space is extremely competitive, and it is entirely digital. Investors needed to understand how solid we are in terms of our marketing approach. Will we be able to maintain current momentum? Can we build on it? Can we continue to create newer values because of additional marketing strategy? So as a CMO, it was my job to convince them on that. Moreover, it is the job of everybody who is a part of the management team to convey the brand proposition clearly."

Tiwari explained that when the IPO happens, the company works as a team because it's a highly regulated market by SEBI, and we must take a lot of legal help. "There are aspects such as the financials, investor relations and things that go beyond the brand that need to be considered and hence, the CFOs viewpoints and expertise becomes important. They must manage the approval bit from SEBI, etc., too. It is not about who takes precedence but it's about managing that extra layer of supervision and validation which the CFO and its team are better able to manage. However, the entire process of creating newer marketing collaterals, print ads or digital communication, or the IPO creatives or the corporate film and all of that remain in the realm of the marketing teams."

Creating a marketing plan for IPO is not a cakewalk for sure. There is a Draft Red Herring Prospectus that the company gives to SEBI before it goes for an IPO. One cannot communicate anything that is not a part of the DRHP. Anything expressed beyond things mentioned in the DRHP will tantamount to a miscommunication. Tiwari said, "Whatever one writes in RHP, gets validated at multiple levels. For every single line of the statement made there, one needs to justify that with enough and more evidence."

Does it impact creativity in communication?

Tiwari answered, "I would say it is slightly more restrictive but having said that, I think we have come up with the right corporate film and corporate TVC. And I've also seen the work of many organisations well on this. I particularly liked the IPO creative of Cafe Coffee Day when I was trying to benchmark how our communication should be."

Talking about how various mediums of communication are leveraged for marketing around the IPO, Tiwari said that just like regular advertising, one does use TV, but the approach is more corporate-driven and informative. "You do more corporate strategy or communicate specific messages around the IPO open date, close date and the price band in which the subscription is available.

On average days, one might avoid newspaper ads, but when it comes to floating the company in the market for the first time, one has to give an important place to newspaper ads in the marketing game. "Normally, in our regular marketing strategy or media strategy, we do not use print. But for IPO, we are using print, where we are printing our corporate brand communication and IPO awareness communication. For example, traditionally, places like Gujarat, Rajasthan, etc., have a lot of investors who put money in the IPOs and we have reached out to them using print," said Tiwari. 

On the digital front, Angel Broking has become an avid advertiser on financial platforms like MoneyControl, CNBC and specific IPO-focused platforms like Chittorgarh. Along with that, the company has continued to focus on influencer marketing to build credibility.

Tiwari emphasised that the purchase decision is far more complicated as compared to just opening a DEMAT account or a trading account with an organisation. He explained that the mindset of the consumer here is different. "The customer's need is different. Hence, your offering will be different. However, you will use TV the way TV is used, or you use print the way print is used. But now what you will communicate, that value proposition will be at a corporate level," added Tiwari.

The target audience for IPO marketing is both B2B and B2C. In B2B, it includes anchor investors such as mutual funds, insurance funds, private equity funds and other institutional investors, merchant bankers.

B2C is an important space to focus before IPO launch, which includes retail investors Tiwari said, "Thankfully, today, even an average millennial customer has also become very IPO and stock market savvy. If they are convinced about the prospect of your organisation, they don't shy away from putting money in the IPO.”

Tiwari concluded, "Finally, one would want to ensure that your IPO is subscribed or rather overly subscribed. While anchor investors will provide the chunk of your investment, there is a certain percentage, which is always dedicated towards the retail investor. We have ensured we don't leave any stone unturned towards getting them engaged and getting their investment for our company's IPO offering."

Info@BestMediaInfo.com