Lets say there is a company ‘XYZ’ which is already listed in local exchange ‘A’ in the country ‘alpha’. Now company decides to go for fresh equity infusion and it has 3 options as following.
1. Listing the company in the same country ‘Alpha’ and in the same exchange.
2. Listing the company in the same country ‘Alpha’ but in the different exchange ‘B’
3. Listing the company in the different country and the different exchange. . .
Would we consider each one of these options as SEO or just the first one as SEO?
Any help is highly appreciated. . . A document on the same would be of great help.
Thanks
Amit
{answer}
What is a “SEO”. That’s not a standard acronym. Is it stock exchange offering?
(1) is called a “secondary placement”.
(2) is called a “parallel listing”
(3) is called a “depository receipt”. When it is listed in the US, it’s an ADR. When it is elsewhere, it is usually called a GDR.
I’m not sure what an SEO is, but only the first two are offerings. The third one is a receipt. Essentially it is not an offering because the shares already exist on a listed exchange. The depository receipt just securitizes them on a third-party exchange, whereby you get a pro-rata amount of economic ownership for those shares. For example, you can have a listing in India for 100 shares. 10 of those shares securitized and then offered via ADR in the US. The ADR is not a new offering, because it is not new money – but really just a sales channel.
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