Behind the Scenes of an IPO

The decision to go public follows a strategic reflection by top management on financing options. Companies often reach a growth stage where debt limits are reached and seek permanent capital without relinquishing control. An IPO emerges as an alternative to debt, enhancing the group's reputation and credibility. From this initial phase, executives engage a financial advisory bank to oversee feasibility, valuation, and the type of operation to pursue. Options include a capital increase (infusion of new funds), sale of existing shares (partial divestment by historical shareholders), or a mixed approach, which is most common in Casablanca. Regulatory guidelines from the AMMC differentiate between market choices—main for large companies and alternative for SMEs—and the introduction procedure. This includes fixed price offers (e.g., Aradei Capital's IPO in 2020 at 400 DH) and open price offers (e.g., Maroc Télécom's IPO in 2004 with a price range of 54.60 DH to 68.25 DH). CMGP Group's operation in December 2024 combined a capital increase of approximately 600 million DH with a secondary share sale to finance agricultural irrigation expansion and increase market float. The prospectus is the cornerstone of the IPO process, containing audited financial statements, projections, governance, and company strategy. This dense document, prepared under the supervision of the financial advisor and auditor, is submitted to the Moroccan Capital Market Authority (AMMC) for thorough review before receiving the introduction visa. This visa certifies compliance and completeness, ensuring the public has clear and balanced information before subscribing. Once approved, the prospectus must be published across various platforms, including the issuer's website, the Casablanca Stock Exchange, the AMMC, and syndicate members, along with a press release in legal publications. For Vicenne, the AMMC visa was granted on June 18, 2025, paving the way for the subscription period, typically lasting 3 to 6 weeks before listing. Valuation is critical, relying on traditional methods like comparable companies and discounted cash flow (DCF) analysis, but must also convince the market. The syndicate, led by the lead manager, refines the offering price based on subscription intentions gathered during pre-marketing. The allocation typically follows a proven structure: - Tranche I: Institutional investors (insurers, mutual funds, pension funds) - Tranche II: Retail investors and local legal entities For Vicenne, institutional investors accounted for about 60% of the total, with 40% for the public, reflecting a desire to involve Moroccan households in the operation's success. The subscription period lasts 4 to 5 business days, overseen by around ten licensed intermediaries. According to AMMC regulations, the company can choose the allocation method: pro-rata, iterative, or qualitative. After the subscription period ends, orders are centralized by the Casablanca Stock Exchange and validated in coordination with the central depository, Maroclear, which ensures proper delivery of shares and cash settlement through the Bank Al-Maghrib system. In cases of oversubscription, the exchange applies a distribution mechanism, often pro-rata. During Vicenne's IPO, demand exceeded 32 billion dirhams for an offering of 500 million, resulting in a coverage rate above 60 times. Each retail investor received only a fraction of their order, increasing interest in the stock during its first session. The day after the results are published, the exchange conducts the first listing, a symbolic moment when the market sets the equilibrium price. For CMGP, the first three days of trading resulted in a 30% increase in stock price with strong volumes. CMGP's market capitalization reached 4.5 billion dirhams, and its weight in the Masi index increased to nearly 1%. The IPO is not an end but a shift in regime and paradigm. The company becomes publicly listed, subject to ongoing information disclosure requirements, including semi-annual and annual results, press releases on significant events, and an annual investor meeting. Transparency becomes a strategic pillar alongside performance. Investors monitor the company based on its post-IPO commitments, including adherence to projections, dividend policy, and governance. Recent Moroccan IPO experiences are instructive: Akdital shows sustained growth (+20% annual revenue), TGCC maintains measured volatility despite a less liquid market, and Disty Technologies serves as a case study for SMEs going public. Since 2021, the AMMC and the stock exchange have encouraged non-financial communication (ESG, CSR, capital transparency), becoming a differentiating factor among issuers. Recent operations indicate a general improvement in competency: better-prepared files, more readable and complete prospectuses, clarified governance, and better-integrated communication strategies. In summary, the Moroccan IPO process spans 9 to 12 months from decision to listing. The AMMC visa ensures transparency but not profitability. Recent IPOs (CMGP, Vicenne) have achieved record oversubscription levels. The post-IPO challenge remains liquidity and consistent communication.