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3. Financing the growth of companies

The Stock Exchange  provides companies with a range of advantageous financing alternatives. A capital increase, coinciding with a company listing or subsequently, is an ideal way to obtain funds to sustain a company’s expansion.

In an increasingly competitive environment, continuous growth has become one of the basic objectives for a company. Efficient management should involve not only the capturing of the necessary funds, but also maintaining the right balance between equity and borrowed funds.

Financing via equity is, thus, essential for giving companies in expansion financial soundness, flexibility and risk reduction.

The most efficient way to achieve this type of financing is via the stock market. Listed companies can obtain, at the most adequate moment, these funds via capital increases, in very favourable conditions.

The stock market is the best framework for obtaining financing via equity

The liquidity that the market offers makes it possible for different investment timeframes, generally not coinciding with the permanent nature of financing, to be combined and so both fulfil their objectives.

In addition, the Stock Exchange  facilitates the company’s access to a wide investor community, both domestic and international, which puts its trust in the firm’s project and shares with it the goal of profit maximisation.

It is this broad scope and large number of investors which makes the placement of diversified capital possible and which enables management control to be maintained, even with lower percentages of capital to those which, in theory, require a simple majority.

The positive current prospects for the Spanish economy in general and the stock market in particular are shaping a very favourable environment for stock market financing.

In any case, the stock market is not just an equity market. Every year the volume of fixed-income issues rises. The stock market provides an ideal framework for the issue of debt securities.

 

 

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