Recent development

On 31 July 2017, Borsa İstanbul A.Ş. amended its Borsa Istanbul Listing Directive (the “Directive”), relaxing and softening the listing requirements for the Star Market (Yıldız Pazar), which is expected to increase the number and volume of initial public offerings.

What changed?

Companies seeking listing on the Borsa Istanbul’s Star Market were required, among other things, to (i) record profits for the last two financial years and (ii) have equity-to-capital ratio greater than (a) 0.75 for the Star Market Group 1 and (b) 1.0 for the Star Market Group 2 listings.

The Directive now allows companies that have not generated any profits in the last two financial years and/or meet the equity-to-capital ratio as set out above to still be listed on Borsa Istanbul’s Star Market if;

  • The companies (i) have recorded operating profits in the preceding financial year and the relevant interim period; and (ii) have equity-to-capital ratio greater than 0.5.
  • The public offering also involves the issuance and offering of new shares (i.e., the issuer receives all, or at least part of the offering proceeds).
  • The other requirements applicable to listing on the Star Market are satisfied (for Star Market Group 1, a minimum offering size of TRY250 million (approx. USD71 million) and minimum market capitalization of TRY1 billion (approx. USD283 million); for Star Market Group 2, a minimum offering size of TRY100 million (approx. USD28.3 million) and minimum market capitalization of TRY400 million (approx. USD113 million)).
  • The board of Borsa Istanbul approves the listing application through considering the issuer’s projections on operations, financial structure and use of proceeds generated from the offering.

Borsa Istanbul will examine the application and decide on whether the issuer (within the scope of the exemption) can be listed on the Star Market.

Further, Borsa Istanbul may decide to include the amortization and redemption costs that do not require any cash outflow when calculating the issuer’s operating profits.


The original listing requirements inhibited the access of larger corporations to capital markets in certain sectors, where companies generate operating profits but are highly leveraged, such as the energy sector and other investment-heavy businesses.

With the Turkish lira’s devaluation in previous years, FX-denominated financial debts have become real burdens for larger Turkish companies that have solid operations and operating profits. The Directive aims to release these companies from high financial expenses and assist them in becoming profitable companies. This development will create a new financing option by facilitating equity financing for these companies, likely decreasing their financial indebtedness, especially hard currency debts.

In addition, relaxing the listing requirements would enable Borsa Istanbul to attract larger Turkish companies that have been seeking offering opportunities in foreign stock exchanges.


Muhsin Keskin leads the Istanbul office’s Banking and Finance and Capital Markets Practices. Muhsin also advises clients on various aspects of mergers and acquisitions including private equity investments.


Baha Erol is an associate in Esin Attorney Partnership. He focuses his practice on capital markets, banking and finance and mergers and acquisitions.