Source of Financing
The ECM primarily offers access to capital via an organized, transparent, orderly functioning and reliable market. Unlike borrowing, the alternative source of finance, equity does not have principal and interest repayment obligations that may pressure the cash flow of a company. As a company’s debt increases, its borrowing capacity weakens; on the other hand, equity ratio strengthens the borrowing ability, therefore allowing the company to obtain financing more easily and at better rates. Thus, it is acknowledged that the financial structures of companies with a falling debt/equity (leverage) ratio get stronger and become more resilient against possible financial difficulties or crises.

Creditors provide loans effortlessly and faster to the Exchange traded companies that regularly disclose their financial and other information, and are audited independently. Companies with a good performance following an IPO can raise further capital with secondary offerings relatively easier. In this manner, ECM traded companies are expected to grow, mature over time and transfer to a submarket of the SM and realize larger public offerings there.

Price Discovery and Liquidity
The ECM enables price discovery by providing a transparent and reliable trading platform and offers liquidity for company shares. As a result of this, company shareholders may use Exchange traded shares as collateral for credit transactions, and can therefore transform that dormant asset into a financing generating instrument. Share price discovery in the market forms a robust basis for establishing company value at mergers & acquisitions or secondary offerings.

Alternative Exit Route
The ECM establishes a benchmark for company valuation by providing share price discovery for venture capital or similar investors investing in companies especially at foundation stages, with the goal of exiting by selling their stakes in the future. Although only the shares issued by a new capital increase can be traded on the ECM, shareholders may sell their shares not listed in the ECM Directory to third parties off the Exchange. On the other hand, if the company transfers to a submarket of the SM eventually, all its shares become tradable on the ISE, and therefore, shareholders can easily sell their shares to exit.

Visibility and Credibility
Trading on the ECM makes a company subject to media news and analysis, as well as intermediary institutions’ reports. Within the scope of transparency and public disclosure function of the ISE, a large amount of information is distributed to local and international investors through Exchange Bulletins, data vendors, media institutions and KAP. Important financial and other information of a company is followed by creditors, suppliers and business partners along with investors. A company gets better recognition both in its operational sector and in the financial markets thanks to reliable, regular and steady information flow. This helps the company access financing, facilitates the marketing and sales of its products and services, and helps find qualified human resources and building business partnerships.

Institutionalization
ECM traded companies can institutionalize faster as a result of disclosing financial and other material information as required by the capital markets regulations, by making regular and timely reporting, and by becoming subject to investor and shareholder interest and scrutiny. Institutionalization can significantly contribute to the reinforcement of the company organization and breaking of the company success and continuity away from the founder shareholders or family.