Any corporate or business needs to draw out efficient corporate capital markets strategies in order to find the funds. These corporate capital markets strategies must focus on key value drivers and the actual value creation process. CL King & Associates experts suggest that the strategies must also give thought to risks that have a good chance of paying off.
The first step in all corporate capital markets strategies should be to look within for some important answers. A review technique must be adopted during value creation. The companies must look through their performance till the present date; look around at the type and extent of competition in the arena, their financing capability as well as their business opportunities. The risks about to be taken must bring back good returns that are convenient for the management. The corporations need to brainstorm and decide what changes that can successfully improve value.
Diversification is a strong move that several companies opt for. There are reliable, flexible capital options in several global markets, which corporations are looking to milk. Along with improving the presence of the company in the domestic market, corporate capital markets strategies must aim at getting noticed in the offshore capital markets. Concentrating on investor needs is a great idea and can help to strengthen the investor base. Additional options include acquisition and secularization.
While working on corporate capital markets strategies, many a time there is asymmetry between company and market perception of priorities. Improving operational results has brought good news because the corporations met the expectations of the capital market. A communications program with road shows and other schemes must be prepared as part of an effective market strategy. Shareholders must always be in the know regarding the business plans and operations of corporations.
The balance sheets must be monitored and restructured if necessary. While ownership restructuring is a common scenario, focusing on transparency and better management incentives as per investor expectations is a must. Buy-back of shares, Spin-off and equity carve-out are other avenues to be explored while fixing up strategies for stepping up the flow of funds from various sources.
The ultimate aim of all the corporate capital markets strategies is to internally and externally enhance the perception of the company value, and reduce the gap between the market perspective and management perspective. This move paves the way for capital and assets required not just for immediate transactions but in the long run as well. To sum up, an effective corporate capital markets strategy must analyze capital markets, focus on development of corporate governance and communications, and work on financing schemes and transactions that will increase the company value in the market.