Investor relations is a function synonymous to listed companies communication towards the market participants. It is THE KEY element driving a company’s business communications strategy.

Usually an initiative at the part of a public listed company, IR departments work to communicate with investors, shareholders, government organizations, and the overall financial community.

IR ensures that a company's publicly traded stock is being fairly traded through the dissemination of key information, primarily to allow private and institutional investors to determine whether a company is a good investment for their needs.

As Stock Price reflects expectations of future returns on capital employed and Lack of information creates uncertainty and a discount to stock price, it is essential that the investors & financial community that largely influence stock price movement should be kept informed.

Thus, IR function facilities;

Ø  Direct means to inform existing and potential investors

Ø  Essential communications function for a publicly company to:

ü  Educate investment community

ü  Shape investor protection

Ø  And also to provide Indirect means to impact shareholder value

A good IR strategy is directly propitious to company’s stock price, since;

Ø  Intangibles

ü  Enhances shareholder value

ü  Support fair valuation of common stock

ü  Minimize stock price risk due to uncertainty over performance

ü  Shape / enhance perception of company commitment to growth

Ø  Tangibles

ü  Maximize analyst coverage (Sell and buy side)

ü  Develop / maintain balanced investor base

ü  Target financial institutions (Domestic/ international)

ü  Track stock valuation

IR acts as a portal, a passage through which investors and company executives communicate, and the first role of an IR function is to create channels of communication for a triage of;

Ideally, an IRO (Investor Relation Officer) represents the function that is central to the communication flow;