As the Covid-19 crisis continues, new rules in the Italian Stock Market are helping to create opportunities for start-ups and expanding SMEs.
As the pandemic continues economies across the globe are experiencing something of a ‘perfect storm’ –the equivalent of a hurricane hitting the most vulnerable area of a region and causing the maximum possible damage.
The full extent of the social consequences and economic and financial difficulties that families and businesses are experiencing are not yet fully quantifiable.
Optimistically, we will eventually emerge from this situation in part through the extraordinary ingenuity of entrepreneurs, who will ultimately prevail over adversity to drive towards a solid recovery.
For this to be realised as quickly and solidly as possible, entrepreneurs need to be provided with alternative financial instruments that guarantee access to substantial and timely resources.
While the Italian stock market is still characterised by a prevalence of banking securities, the Borsa Italiana, particularly through the AIM Italia market dedicated to SMEs, is strongly developing allocation channels for equity and debt for start-ups and other smaller companies operating in specific market segments.
More specifically, with the rules that came into force on 20 July last year, a new segment reserved for “Professional Investors” has been introduced to meet the listing needs of a wider number of companies and to facilitate the entry of SMEs, start-ups and fast-growth companies in AIM Italia. The access requirement is a minimum free-floating capital of 10%.
In brief, this new segment of the AIM Italian market helps SMEs in a number of ways. It supports businesses that do not have an immediate need for capital and are waiting for more favourable market conditions. It also enables companies to use the time between admission to AIM Italia and allocation to raise their profile with professional investors, the future subscribers of their capital.
Additionally, it helps Italy’s many start-ups and expanding businesses to enter the market more gradually. The time between admission to AIM and allocation enables companies that have been marketing their services and products for at least a year, to fully implement the relevant processes and functions their business plan requires.
AIM Italia is proving to be a very resilient market during the Covid-19 pandemic, despite the deep wounds the crisis is leaving on the financial structure of companies and increasing their need for liquidity.
It creates an important opportunity for the consolidation and growth of SMEs, both Italian and foreign, which enabling companies to weather the storm and emerge better structured, more consolidated in their key markets and optimally capitalised.
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Date: January 2021