Turkey: Initial Public Offerings in Turkey

Last Updated: 30 November 2010
Article by Göksu Gürbüz


Public offering may basically be defined as sale of stocks (shares) of a joint stock company to several unknown investors through a call and announcement. Public offering includes (i) every kind of appeal to public for purchase of capital markets instruments, (ii) invitation of public to subscribe in a joint stock company or act as its founder; (iii) continuous trading of shares in stock exchanges or other organized markets and (iv) sale of shares of publicly held joint stock companies to increase the capital of such companies. Accordingly, public offering may be conducted through issuance of any type of capital markets instruments excluding derivatives.

Under Turkish law, joint stock companies are the only private corporate entities entitled to conduct public offerings and issue capital markets instruments. Both joint stock companies with equity capital and joint stock companies with registered capital can make public offerings.

The main purpose of public offerings is to provide financing to joint stock companies. By public offerings joint stock companies can provide liquidity inexpensively. In case a joint stock company conducts public offering through capital increase, such company will have a larger amount of capital without causing any further expenses to the existing shareholders.


Public offering involves either (i) public offering of shares of a non-publicly held joint stock company ("issuer") in the primary market by the issuer itself ("initial public offering") or (ii) sale of shares by an existing shareholder(s) of the company ("secondary public offering"). Alternatively, (iii) these two methods may be combined and the issuer can undertake a capital increase while an existing shareholder(s) of the issuer proceed to sale of all or part of its/their shares to public.

In addition, it is possible for Turkish joint stock companies to conduct global public offerings and offer their shares to public in different countries concurrently.

2.1. Initial Public Offering ("IPO")

IPO means sale of capital markets instruments which are newly issued in primary markets. IPO can be conducted either during gradual formation of joint stock companies or through capital increases undertaken by already existing joint stock companies. However, in Turkey IPOs are being conducted through capital increases in most of the cases.

In practice, a typical IPO procedure conducted through capital increase may take six weeks to four months.

2.2. Secondary Public Offering ("SPO")

SPO is conducted through sale of existing capital markets instruments by existing shareholders of joint stock companies. Turkish capital markets legislation sets forth certain specific restrictions in relation to public offerings conducted by existing shareholders of joint companies.

2.3. The Combination

A single public offering can be conducted in the primary and secondary markets concurrently. In this type of combined public offering, the issuer offers newly issued capital markets instruments to public while existing shares held by the shareholders becomes publicly traded.


3.1. Getting Ready for Initial Public Offering

In order for a non-publicly held joint stock company to conduct IPO, it shall amend its articles of association in accordance with the capital markets legislation. In case the current articles of association of the issuer contains provisions restricting transfer and/or circulation of shares and/or preventing exercise of shareholder rights, such provisions shall be cancelled and also other provisions of the articles of association shall be adapted to Turkish capital markets legislation.

In addition, a resolution regarding capital increase which includes provisions restricting pre-emptive rights of the current shareholders shall be adopted. The type of such resolution is to be determined based on the share capital system of the company.

Furthermore, the issuer company has to get its financial statements drawn up in accordance with Turkish capital markets legislation and have them inspected by an independent authorized audit firm.

3.2. Intermediary Institution

Excluding the exceptional cases, it is mandatory for an issuer company to execute a brokerage agreement with an intermediary institution authorized by the Capital Markets Board (the "CMB"). Significant strategic issues such as responsibilities of the intermediary institution (e.g. underwriting obligation of the intermediary institution) and the method to be adopted for IPO shall be determined under the brokerage agreement.

3.3. Registration of Shares with the CMB

Capital markets instruments can be issued and offered to public provided that they are registered with the CMB. Therefore, an issuer shall apply to the CMB for registration of its shares with the CMB.

During a regular IPO procedure, the CMB would first review the proposed amendments to the issuer's articles of association. In addition, prospectus and offering circular shall be presented to the CMB during this application.

The CMB conducts a due diligence and visit the headquarters and facilities of the issuer during this procedure. The CMB determines whether registration of shares shall take place based on the outcome of the examination of the prospectus and offering circular and the due diligence conducted by the CMB.

3.4. Istanbul Stock Exchange (the "ISE") Listing

The ISE is the only stock exchange of Turkey. Listing on the ISE means the acceptance of registration with the respective market of the stocks which are requested to be continually traded on the securities exchanges.

An issuer shall apply to the ISE for listing of its shares at the ISE. This application is subject to certain listing requirements specified in the relevant regulations. The ISE conducts due diligence at the headquarters of the issuer in order to decide whether the issuer is eligible for listing of its shares at the ISE.

ISE listing and registration enables the stocks offered to public to be traded on the ISE. In addition, listing of stocks on the stock exchange provides companies with creditworthiness, institutionalization, recognition, and improves integration of the company with national and international markets.  

3.5. Other Significant Requirements

Registration of the prospectus with the trade registry, announcement of the prospectus in the trade registry gazette, and announcement of the offering circular in daily newspapers shall take place following registration with the CMB.

In addition, a general assembly or board of directors meeting in which a resolution regarding approval of the earlier proposed amendments will be adopted shall be held. Type of the resolution required shall be determined based on the share capital system of the issuer.

Furthermore, the issuer shall apply to the Central Registry Agency at this stage for records on capital market instruments and rights related to them are kept by the Central Registry Agency.

3.6. Trading of Shares

Trading on stock exchange means purchase and sale of stocks by investors. Trading of shares at the ISE shall take place in accordance with the terms and conditions designated under the prospectus.

Following the sale of stocks, issuers and intermediary institutions shall inform the CMB and ISE regarding results of the public offering.

3.7. Sale Methods

Book Building is a sale method which enables underwriters to collect orders from investors prior to offering of shares. Through book building underwriters will be able to determine the amount of demand for the stocks of the issuer.

Sale Through the ISE is a sale method applicable by issuers with net asset value exceeding TL 10,000,000. Book building does not take place in case the sale through the ISE method is used for IPO.

Sale Without Book Building is a sale method which can be used by already publicly-held joint stock companies under certain conditions. Under the sale without book building method issuers are authorized to offer capital markets instruments at a pre-determined fixed price to investors without book building.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions