Local IPO market on track for recovery

This is after 29 IPOs were recorded in the country with up to RM2.3b raised in 2021

by FAYYADH JAAFAR / Pic by TMR

THE Malaysian IPO market is on track to recover after a slump in 2020 due to the Covid-19 pandemic.

A total of 29 IPOs were recorded in the country with up to RM2.3 billion raised in 2021.

According to the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) VP Datuk Looi Hye Ting, the IPO market will continue to grow over the next few years.

“In Malaysia, the outlook for IPOs remains positive after a slowdown in the year 2020 because of the pandemic, but last year, the IPO markets have recovered to their pre-pandemic level,” said Looi during his welcoming speech at the “From Strong to Stronger — Is Going Public Your Next Milestone?” webinar held by ACCIM today.

“For many businesses, an IPO is a major milestone in their list of corporate achievements. It is a badge to honour the growth and recognition of success.

“However, the excitement comes along with its challenges. What strategies to consider and understanding the market at the time will be crucial to whether your IPO will be successful,” he said.

He added that being listed opens the door to many opportunities, including funding for market expansion, attracting quality tenants and increased revenue. Additionally, being listed also helps companies to gain more publicity and position themselves as a brand.

The webinar by ACCIM was organised to enhance the public’s understanding of the IPO market.

Among the speakers were QuinRiver Capital CEO Theresa Elizabeth Lim, who spoke about the advantages and disadvantages of an IPO and the journey from a private company to a public-listed company.

Theresa said the key factors for a successful IPO include having a strong management team, good product or service and ensuring the company has sufficient working capital.

At the same time, she also highlighted some drawbacks of an IPO such as the need to disclose information, the risk of losing control, the need to comply with stricter regulations and the possibility of being delisted if there are problems with the company.

In regards to timing, Theresa advised that one should go public when they believe that the market conditions are favourable to the company and when the market price is higher than the share price, as this would give the company a better valuation upon listing.

Additionally, she suggested that the best way to prepare for going public is to build up a solid foundation first, such as having a strong management team, creating a compelling equity story, fair pricing, right timing and being “IPO ready” to meet capital market requirements and investors’ expectations.