Getting ready for IPO

A PUBLIC listing on the stock exchange is a defining milestone for any business, marking the culmination of grit, foresight and ambition.

It opens the door to greater capital, enhanced market visibility and a platform for accelerated expansion.

Interest in Malaysia’s equity markets remains strong despite an uncertain external environment, with Bursa Malaysia recording 43 new listings as of Oct 9 – well on track for its target of 60, the highest in Asean.

A successful initial public offering (IPO) demands careful preparation, the right advisers and partners, a compelling narrative and engagement strategy, and a deep understanding of market dynamics.

Bring the right investors

As advisers, we see an IPO as just the beginning of a new chapter. True success lies in sustaining momentum and positioning the company for long-term growth.

Key to that is attracting the right shareholders who will actively support the company post-listing and are aligned with the management’s long-term goals.

Institutional investors, such as pension funds, asset managers and insurance companies, are often the key players in this equation as they bring both capital and strategic insights.

What are investors looking for?

Investors’ primary question is the company’s growth strategy. They will scrutinise expansion plans – whether through new markets, acquisition or technological innovation – and assess whether the company has the operational capacity, financial strength and management capability to execute.

A proven track record adds confidence, balancing ambition with a practical, well-planned approach.

A healthy balance sheet and optimistic industry outlook provide the foundation for growth, while excessive negative carry can raise concerns.

Investors also expect accountability and transparency on how IPO proceeds will be deployed to generate sustainable returns – a clear signal that the company is ready to scale responsibly.

The company’s strengths and plans must be transparently articulated through the IPO prospectus, roadshows and media engagements.

Consistency, clarity and communication regularity before, during and after the IPO are essential to building investor confidence. Investors will also scrutinise corporate governance.

Often, prior to listing, companies have to take steps to enhance their corporate governance, such as ensuring the right mix of independent board directors and separating the roles of chairman and chief executive officer.

Strong governance supports long-term sustainability and attracts long-term investors – a critical factor for post-IPO success.

Is it a good time to list now?

Liquidity in the market remains ample, supporting companies considering an IPO. However, market sentiment can fluctuate, and the subscription rate for the retail tranche is a useful indicator of investor appetite.

In 2024, the average over-subscription rate for retail offerings on Bursa Malaysia was 67 times, dropping to 28 times year-to-date in 2025.

Companies need to stay flexible and adjust expectations based on these dynamics.

We are seeing improvement, as recent IPOs in September have registered an average over-subscription rate of 31 times.

The improving sentiment bodes well for Bursa Malaysia, especially when we still see a strong IPO pipeline for the next 12 months.

We will be seeing quite a number coming through from a broad range of industries covering transportation and logistics, technology, retail, healthcare, digital media, industrial, renewable energy, property, and real estate investment trusts (REITs).

When evaluating timing, we often advise clients to distinguish between short-term and long-term perspectives.

While sentiment can affect immediate IPO success, long-term objectives ultimately matter.

Plan for adversity, not just opportunity: set a practical base-case valuation aligned with your business plan and IPO pricing, and approach the process from there.

What if the IPO debuts during low sentiment?

Even if market conditions are not ideal, companies with clear, differentiated business models and solid track records can still capture market attention.

Focus on your broader strategy, even if the IPO debut faces short-term headwinds.

From March to July this year, there was a significant dip in market sentiment, but we were able to launch three Main Market IPOs successfully – namely HI Mobility, Eco-Shop, and Paradigm REIT – raising a total of RM1.7bil.

The average performance for these IPOs was plus 7%, and today it stands at plus 45%.

A public listing marks the start of a new chapter, bringing higher transparency and responsibility to a wider set of stakeholders.

Instead of asking, “Can I get a high valuation?”, ask, “What do I want this IPO to mean for my company?” With the right purpose, preparation and partners, your company can create long-term stakeholder value after striking the gong on listing day.