Rostow Ravanan is the CFO and co-founder of Mindtree, an India-based technology services company, with 28 offices around the world. He led Mindtree’s 2007 IPO, and was responsible for defining and implementing processes that have led to the company winning several awards for corporate governance.
Build credibility with the investment community
There is a need to communicate constantly with the investor community. Businesses go through ups and downs, but if you build the company’s credibility with investors, they will have faith in you, even during bad times.
If you meet investors at a time when you are experiencing problems, they will probably only want to discuss the challenges. Explain clearly what went wrong and outline the measures you are taking to overcome those challenges. People like to be part of solutions, and at least some well-meaning investors might be able to give you ideas that could help solve your problems.
Be conservative in your valuation during an IPO
When it comes to fixing the IPO price for your company, I strongly advise CFOs to be conservative. Don’t be greedy. Keep a reasonable margin of, say, 20% — let investors make money on your IPO.
The stock market goes through ups and downs; if people lose money, they will also lose faith. This margin will help you build your brand for the future.