Preparing for an IPO in the Baltic Region: Key Steps and Lessons Learned

An Initial Public Offering (IPO) is a major milestone for companies seeking access to public capital and greater visibility. In Lithuania, Latvia, and Estonia, the process follows EU and local regulations, and Nasdaq Baltic listing requirements. While general recommendations, such as building a strong advisory team consisting of investment bankers, auditors, and lawyers with local and international expertise, applies across the Baltic markets, other insights are best illustrated by recent cases.

Strategic Assessment and Timing

Going public should align with the company’s long-term strategy. It is essential to assess market conditions, capital needs, and alternatives.

For example, Ignitis Group (Lithuania) faced market volatility and debates over listing state-owned firms. Timing was crucial – pricing too high risked losing retail investors, while pricing too low risked undervaluation. Similarly, Enefit Green (Estonia) spent four years preparing for its IPO, postponing multiple times due to acquisitions and uncertainty caused by COVID-19. When market conditions improved, the IPO was a success—demonstrating that patience pays off.

On the other hand, AirBaltic (Latvia), has yet to find the right timing for its IPO, which has been in preparation for some time. The reluctance to launch IPOs of State-owned companies is partly due to a public misconception that IPO equates to privatization, a State-led asset disposal which has not always delivered successful outcome in the past. In the meantime, several smaller IPOs (INDEXO, DelfinGroup, Eleving Group—the largest private IPO so far) have been successfully conducted in Latvia.

Regulatory Compliance

Organising a public offering involves preparing a solid and comprehensive prospectus that provides detailed information about the financial standing of the company and other key aspects. For offerings up to €8M Baltic harmonization allows a single English-language document across all three countries – which reduces costs and accelerates the listing process. Additionally, Nasdaq Baltic exchanges are supportive of dual listing structures. To illustrate this possibility, the IPO of Ignitis Group (Lithuania) combined shares and global depositary receipts (GDRs), listing on Nasdaq Vilnius and London Stock Exchange. This marked Lithuania’s first use of GDRs in over 20 years, requiring a custom clearing structure. Similarly the IPO of Tallinna Sadam (Estonia) required amendments to Estonia’s State Assets Act to ensure that the State as a shareholder has access to the same information as all other investors.

Corporate Governance and Controls

Public companies need independent boards, robust compliance frameworks, and audited financial statements. Auditors provide a “comfort letter” confirming accuracy of the financials. In addition to these requirements, both for Ignitis Group (Lithuania) and Enefit Green (Estonia) invested heavily in ESG compliance, transparency, and clear communication of the company’s green transition strategy to build trust with international investors.

Financial & Operational Readiness

It is essential to upgrade financial reporting systems to comply with the IFRS, to prepare pro forma financials for major changes, and set up a due diligence data room. Additionally, addressing tax and ownership issues early on can help avoiding complications later.

A well-organised group structure is equally important. For example, prior to its IPO, Ignitis Group (Lithuania) delisted subsidiaries (ESO and Ignitis Gamyba) to prevent valuation distortions – failure to take this step could have cost hundreds of millions.

Bottom Line

IPO preparation in the Baltics takes 12–18 months and requires seamless coordination across legal, financial, and operational fronts. While harmonized rules and integrated financial infrastructure provided by Nasdaq Baltic facilitate cross-border listings, success depends on early planning, strong governance, and guidance of experienced advisors. Timing and trust—especially ESG credibility—are critical to securing investor confidence and achieving successful listing.