All About Investor Relation

It is important to understand the company before you invest. Doing thorough due diligence is a great way to do this. This involves reviewing the records of the company, including financial statements and corporate governance policies.

But how can you access all this information? This is where the Securities and Exchange Board of India, (SEBI), and its rules and regulations come in handy. All public limited companies that are listed on Indian stock exchanges must make all information about their entities public.

All publicly traded companies have an investor relations division. This is responsible for providing information to potential and existing investors. Here's a deeper look at what investor relations are and what their duties and responsibilities are.

What is investor relations?

As you can see, investor relationships (IR), is part of a listed company. Investor relations is a combination of inputs from many divisions within a company, including compliance, marketing, communication and legal.

The information is then made public to be shared with potential and existing investors. Investor relations helps investors obtain the most current, accurate, reliable information directly from management. This reduces the chance of misinformation being spread. Investors can use the information released by the company to make informed investment choices and decisions.

Investors can access all information about companies by visiting the company's website. Nearly every Indian listed public company has an 'investor relations section' on its website. This section contains all the information an investor needs to make informed decisions about whether or not to invest in that company.

Investor relations, which can be described in a simpler way, is the link between a company's management team and its potential and existing investors.

Why is investor relations important to a company?

Let's now understand what investor relations means.

Investors tend to value transparent companies and those who maintain trust with them. If the company is honest with its investors, it will be able to enjoy a higher valuation over time.

Investor relations are crucial in this area. The success and growth is dependent on the company's IR department. It works to increase transparency by providing timely and appropriate communication.

What roles and responsibilities do investor relations play?

Investor relations play a role beyond being a link between investors and company executives. Let's take a look at some of these.

1. Provide financial information on the company to potential and existing investors to help them make informed investment decisions.
2. Current and potential investors receive accurate and timely non-financial information, such as compliance-related information and corporate governance reports.
3. Investor relations is not just about representing the company to its investors but also the investors to it. The job of an IR department of a company includes coordinating with investors via calls and meetings, listening to their grievances and bringing them before the company for redressal.
4. Ensure compliance with all applicable laws, rules and regulations.
5. To support the company's efforts to achieve a share price that accurately represents its intrinsic value.
6. In the event of an Initial Public Listing (IPO), or a Follow-On Public Offering (FPO), the marketing team is responsible for communicating vital information to potential investors.

What are the benefits of investor relations for the company?

A company can enjoy many benefits and advantages from a well-run investor relations department. Let's look at just a few.

1. An investor relations team is dedicated to enhancing and adding value for shareholders.
2. IR improves transparency and information dissemination to investors and helps retain loyal shareholders. It also increases the likelihood of new investors joining the company.
3. IR helps to build trust and credibility with investors. This makes future fund-raising easier and more favorable for the company.
4. The investor relations department plays an important role in generating and maintaining public interest in stock options when a company is preparing for an Initial Private Offering (IPO). The IR team also assists in the preparation of the prospectus, which contains all the necessary information about the company.

Conclusion

The investor relations section is a vital part of any listed company, just as the finance division. To ensure greater cross-communication, the IR division is often tightly integrated with other divisions within a company.

The investor relations team is responsible for keeping the company compliant with ever-changing regulations and implementing those changes throughout the company. The IR division advises the company’s executive management on how to ensure that the entity receives a fair and consistent treatment from investors.