A Qualitative Analyses On Valuation Methods For Initial Public Offering (IPO) Based On The Case Of LAFARGE Company In Morocco

The financialization of the world economy is an indisputable turning point at the beginning of the third millennium.The world is witnessing a transition from a debt economy to a liberal market economy where the capital market is the first recourse.This transition has allowed economic agents to finance themselves in real time and has been able to guarantee a direct meeting between agents with financing capacity and others expressing a need for capital in order to secure an investment.Bank intermediation is thus reduced leaving room for direct financing on the capital market.However,despite the contribution of this financial system to the growth of the world economy,this system has created structural crises that have led several economies to chaos.The limited rationality and the thirst for quick and easy profit are the main causes of this disaster.The company wants to make new investments without calling on its current shareholders or bankers.The company wants to reduce its debt.As a reminder,a fundraiser does not correspond to a loan in accounting.It is entered in the balance sheet at the level of the company’s equity and not in debts.Also,rather than taking out a loan,the IPO can prove to be advantageous for any company that wishes to maintain or even reduce its debt.In these first two cases,the company will issue new securities on the market(shares,often with preferential subscription rights,convertible bonds,etc.)in order to increase its financing capacity.This is an introduction by capital increase.The company may decide to open its capital in order to bring in new investors.In this case,it allows its current shareholders to leave all or part of the company;it is often a requirement of the venture capital funds which,having accompanied a company during its first years,wishes to recover its funds with if possible a strong capital gain.In the latter case,the company does not issue new shares(or other securities).It is therefore not an introduction by capital increase but by transfer of securities.An IPO also makes it possible to strengthen the company’s credibility vis-a-vis the many intermediaries with which it ensures the development of its activity(suppliers,customers,banks,etc.).For example,it is not uncommon for a business to borrow at lower rates following the transaction.An IPO is a financial transaction intended to raise funds on a stock market.Depending on the profile and objectives of the company,three situations can arise:The company wants to make new investments without calling on its current shareholders or bankers.The main problem of this project of end of studies consists in the valorization of a company with a view to an introduction on the stock exchange.The choice of this problem is by no means coincidental,it is the result of a reflection that has persisted throughout my studies.My project will focus on choosing the most representative method of evaluation.This method takes into account both the internal indicators of the enterprise and the external indicators which take account of the enterprise sector.According to this logic,my report will be divided into two separate parts.Through both parties I will try to find a solution to the problem of my graduation project.The first part will consist of a presentation of the host organization,a summary of the main players on the Casablanca stock exchange,as well as a treatment of all the stages leading to an IPO.The second part will include a practical analysis of a company integrating its sectorial and financial analysis,an explanation of the valuation methods including that of the stock exchange comparators and its application to the chosen company.