How financial PR is helping investors in IPO season and bringing credibility

With a plethora of companies coming forward with their own IPOs in quick succession has created buzz in the financial market. In the recent past many start ups have entered the IPO market and the various financial partners and merchant bankers are busy promoting and pushing these IPOs so that they get over subscribed multiple times and a good investment climate is created through this over subscription. Today, both the institutional and the retail investors are smart and well educated toinvest their money in the right script both in the secondary market as well as the new IPOs that keep coming. If one recalls in the early days of IPO, a good amount of corporate build up is planned by companies followed by the brokers and press conferences, where the big announcement of the IPO is done where you see the company owners/ founders and CMDs of the company closely engage with the media by making their point on why their IPO will do well and briefly touch about the growth journey of the company and its future outlook.

Every company is eager and keen to create wealth for their shareholders, which is their ultimate goal. But for the company to expect the public to invest, a good corporate and successful growth story has to be told about the organisation, which will make people believe to consider in investing after having carefully researched the fundamentals of the company from various media sources. This is where the power of financial PR will become an important tool for corporate brands to lean and paint the right and credible picture to its external stakeholders. With several government bodies like the presence of SEBI and RBI there has been a tight control and on looking into the financial health of many companies that plan to launch their IPO. With the presence of the governmental bodies’ companies are also watchful and careful on their communication strategies and messaging before any PR campaign hits the media. PR agencies who add immense value to their clients are today employing experts internally who understand the financial markets with good knowledge in the finance business and investor relations to handle the Financial PR, as decoding that financial numbers with out any fuzzy image to the outside world is of paramount importance to build in credibility with the external audiences and investors.

The rise of social media and use of influencer marketing has changed the dynamics of financial PR. With multiple financial portals, blogs andfinancial guru’s and pundits sharing their expert views are being leveraged by many corporates. Having said that, every piece of communication from companies arebeing tightly screened and monitored by SEBI and RBI to stay within the boundaries by guiding the investors and passing on the right and correct information for the potential investorsto prudently make their investment.It is the financial PR experts who advocate relationship management with key market analysts who directly influence the financial communities.

So, with the rise in influencer marketing these experts need to be cultivated and provided with the right financial statutes and picture of the companies for them to send transparent and a credible message in the money market. The financial PR has really given a boost to many corporates and are able to carefully nurture and build their reputation with perfect and purposeful communication. Which has further supplemented them to engage with investor community more confidently and in meaningfully.

Financial PR is the key to build brand equity, especially for companies planning to go the IPO way. According to Akanksha Jain, Head - PR and Communications, BharatPe, PR plays a key role in communicating the right story and building trust amongst stakeholders – including investors and customers. It also helps to push the message that the company’s business is robust and all its engines are firing. There is no quick fix for this and this needs to be a focused campaign over a period of time, so as to ensure impact.

Continuing further, Jain pointed out that there has been a huge rise in online media over the last couple of years, driven by the rise in the adoption of smartphones and penetration of the Internet. Print media faced a tough time during COVID. Today, companies are leveraging their social handles as well as social network of their senior leadership to drive campaigns. “At BharatPe, we have leveraged social media extremely well to create buzz for our employee and product campaigns over the last one year. One of the key highlights was the new tech hiring campaign in July this year where we were able to create huge impact with drive thousands of conversations across Twitter and LinkedIn,” she added.

She further said, “Influencer marketing is doing well, but I believe the future belongs to those who have high credibility and don’t seem to be promoting any/every product. Niche and intelligent content will be the key.”

While talking to the team of Concept PR, we had views from different segments of Financial PR, where each one of the specialised divisions shared their relevant views. Commenting on the subject Tina Pawar, Senior Vice President, Lead - BFSI, said “Financial PR can turn a BFSI customer’s dreams into reality. The increased number of initial Public Offerings (IPOs) and the excellent response have raised awareness of BFSI products and services among retail consumers. Presently, the BFSI sector is experiencing good times. Certain macro-level events like the pandemic and good government policies boosted the industry in recent times. As a result, customers are now looking for information and are willing to avail themselves of various financial services’ offerings.In this scenario, financial PR is the most credible source of information about financial products and services. In addition, the third-party endorsement provided by financial PR is a powerful tool.”

“Treat an IPO as an integral part of brand building,” said Lalit Jaisingh, Senior Vice President, Lead – IPO and Financial Communications. According to him, as of date, in CY 2021, we have seen close to 53 IPOs that have tapped the Equity Capital Markets raising almost Rs 1.08 lakh crore, far surpassing CY2017, where 36 firms had mobilised Rs 64k crore.”

Most of the IPOs hitting the market have been an ‘Offer for Sale’ from private equity players looking to cash out wholly or partially. Depending on the period, they have held on to their investment or as decided. Given that a company needs to dilute between 10-25% to go public, the regulators are also relooking at this, particularly for larger IPOs.

Talking about Unicorns and other non-traditional sector companies tapping public fundraising, Jaisingh said, “The Growth Vs Profitability matrix is still to be understood by the Retail Investors, who is driven by the market euphoria and grey market conversations, and are chasing that listing gain. The profitability of a company is not the only metric. Therefore, there is a need to educate the investor class through the media on the company’s business with their track record.”

There should be a continuous PR outreach to help investors make a well-informed decision and not just rely on conversations of market participants besides the social media chatter. Companies should treat an IPO as an integral part of the brand-building process and not just a transaction.

Reiterating on the need and importance of digital, Monish Ghatalia, Executive Director and Head of Digital Strategy, said, “Digital PR delivers relevance and communicates at diverse levels.” Continuing further, he remarked that the pandemic hit the media landscape with a seismic force. Suddenly from being a balance between physical and digital, it has become almost digital only.

Even in the BFSI space, the tectonic shift can be seen. In an IPO, digital PR delivers relevance to communicate at diverse levels of interest, intent and topics of conversations or questions that prevail across online channels. When you blend it with the overall PR strategy, the best use of social media drives information in a sharper way to the potential investors. Data, Analytics, Measuring Conversation Patterns and Trends are critical to driving engagement on digital.

Going forward, the focus on digital will continue to sharpen because customers today can access the information themselves and don’t need any advisors, etc., to help them. This means more digitalised BFSI products.