An overview of IPOs in Thailand
Key takeaways
- To list on the Stock Exchange of Thailand, a company must first conduct an Initial Public Offering.
- Only publicly traded companies can offer shares to retail investors in Thailand.
The IPO market in Thailand
As Thailand’s economy continues to recover after the disruption caused by COVID-19, it is expected that Initial Public Offering (IPO) will experience an increase.
With interest rates set to fall and the economy showing potential signs of growth, it is a suitable time for companies to consider listing on the Stock Exchange of Thailand (SET).
By opting to conduct an IPO, companies should be aware of the legalities of the IPO process and develop a strategic and comprehensive marketing approach with the aim of attracting institutional and retail investors.
Furthermore, the SET is currently in the process of elevating its supervision capabilities of registered companies. For example, the SET is implementing enhanced criteria and supervision of registered companies, with the aim of improving the quality of listed companies and increasing investor confidence in the SET.
The main regulatory bodies, exchanges, and agencies
The market for IPOs in Thailand is governed by the Securities and Exchange Act, B.E. 2535 (1992).
The Act resulted in the establishment of the Securities and Exchange Commission (SEC), which is the governing body for IPOs and related functions in Thailand. The Act also resulted in the creation of the SET, which is Thailand’s primary stock exchange.
Furthermore, companies seeking to conduct an IPO must comply with the various SET listing rules and regulations that govern the listing of shares on Thailand’s stock exchange.
Issuance and Offering of Securities
Under Thai law, only a publicly traded company can offer shares to retail investors. To become a publicly traded company, the company must conduct an IPO.
To proceed with an IPO, the company must seek the approval of the SEC office by filing their registration statement and submitting an initial draft prospectus, commonly known as ‘Offering Documents’. The Offering Documents also need to be submitted to the SET for their approval to list the shares.
An IPO can only be permitted after the Offering Documents have become effective and the SEC office has granted their approval.
It should also be noted that an SEC-approved financial adviser is required to sign off on the Offering Documents, while underwriters are required to manage the IPO process.
To protect retail investors, the SEC will only grant approval for an IPO if a strict criteria is met.
Issuance and offering of securities
To raise funds, companies can issue equity or debt securities. Securities that can be issued under the SEC Act include debentures, shares, convertible securities, bonds, investment units and so forth.
Legal requirements governing the offering of securities will depend on the type of security in question. In principle, there are two key requirements governing the offering of securities to investors, including:
- Approval by the Securities and Exchange Commission
- Filing of applicable registration statement and prospectus
How can WSR international help your business?
WSR International has helped various companies throughout the IPO process in Thailand and further afield.
With business and legal experts located in both Bangkok และ Phuket, WSR International are perfectly situated to assist you.
If you would like to discuss the contents of this article in further detail, please do not hesitate to reach out to the business and legal experts at WSR International.
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