Concepts and Schedule in Public Offerings

Concepts and Schedule in Public Offerings - The public offering is an operation where newly issued shares ( OPS ) are put up for sale, or large packages of shares that can be from the company itself or from a large shareholder, it means that t…

The public offering is an operation where newly issued shares ( OPS ) are put up for sale, or large packages of shares that can be from the company itself or from a large shareholder, it means that they are not created, they only change hands ( IPO ).


When we talk about public offers of sale or subscription, there are common terms for the two operations that we must know.


Essential Concepts of Public Offerings


Among the most important concepts of public offerings are:

  • Tranches: These are the different groups of investors to whom the offer is directed, we find the retail tranche (small investors), qualified investor tranches (formerly called institutional) and the employee tranche.
  • Maximum retail price: It is the maximum amount that retail investors will pay for each share that is awarded to them.
  • Retail price: It will be the lower of the following two: 1) the maximum retail price, 2) the price set for the tranche of qualified investors.
  • Mandate / Request: They are two documents that have the same utility, to access the shares offered before they go on the market where their value can skyrocket.

The mandate is delivered before the maximum retail price is set, so we can access the offer before knowing the maximum price to pay, therefore we are given the opportunity to revoke the order if that price does not interest us.


The request also shows our willingness to access the offer, but it is delivered after knowing the maximum price so it does not give us the opportunity to revoke the order.

  • Revocation period: For those who have submitted mandates and do not want to finally participate in the offer, since the final price is not attractive.
  • Proration: If the supply of shares for the retail tranche is less than the demand (mandates or requests), those who have submitted mandates take precedence.

Schedule of an IPO / OPS


The chronological process for an IPO or OPS is as follows:


  1. Register the brochure with the CNMV.
  2. Beginning of the mandate formulation period.
  3. End of mandate formulation period.
  4. Fixing the maximum retail price.
  5. Beginning of the period of binding purchase / subscription requests.
  6. End of the period of binding applications and the period of revocation of mandates.
  7. Performing proration (if necessary) and setting the maximum retail price.
  8. Admission to trading on the stock exchange.
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