The Alternative Securities Market (ASeM) is a specialized board of The Nigerian Stock Exchange (NSE) for small and mid-sized companies with high growth potential. ASeM provides the opportunity for these companies to raise long term capital at relatively low cost from the capital market, while creating opportunities for growth and institutionalisation of companies listed on the board. On ASeM, there is no limit to the amount of capital a company can raise. The company must comply relevant requirements of the Corporate Affairs Commission (CAC) and the Securities and Exchange Commission (SEC).
Companies operating in these sectors - Agriculture, Construction/Real Estate, Consumer Goods, Financial Services, Healthcare, Industrial Goods, Information &Communications Technology (ICT), Natural Resources, Oil& Gas Services- have listed on the ASeM.
Methods of listing include: (a) Initial Public Offering, which is the offering of shares of company to the public for the first time, (b) listing by introduction where the shares of the company a re-admitted to ASeM without any capital raising exercise. Listing requirements will already have been met and existing investors will offer a portion of their shares for trading on the day of listing, in order to meet free float requirements and create an initial market for the shares. This route is usually adopted when a company wants to be exposed to the investing public before raising capital.
Requirements for admission to ASeM include:
- Company must be duly registered as a Public Limited Liability Company under the Companies and Allied Matters Act;
- Company must have been fully operational for not less than 2 years;
- Comprehensive Business Plan; d) Audited Financial Accounts;
- Public investors are to hold not less than 15% of total issued shares of the company, while pre-listing investors hold a maximum of 85% stake;
- Post IPO, promoters are required to retain for a period of 12months, at least 50% of shares held prior to the IPO;
- Shareholders of not less than 51; (h) Compliance with International Financial Reporting Standard (IFRS)
- Employing ASeM appointed Designated Adviser;
- Paying Annual Listing Fees of N200,000.
Benefits of Listing include:
- Access to long term capital;
- Reduction of promoters’ financial burden and risk spreading amongst shareholders;
- Membership of a global platform that affords brand visibility and credibility enhancement;
- Opportunity for initial investors to realise some or all of their investment;
- Liquidity for shareholders and transparent price discovery;
- Capacity building;
- Professional guidance (Designated Adviser).
Post Listing Obligations include Submission of quarterly, semi – annual and annual financial statements to The Exchange, SEC and Retainership of the services of a Designated Adviser, throughout listing period on ASeM.