IPO Application: A Guide to Listing Your Company in Malaysia

IPO Application_ A Guide to Listing Your Company in Malaysia

IPO Application: A Guide to Listing Your Company in Malaysia

An Initial Public Offering (IPO) marks a significant milestone in a company’s journey, allowing it to transition from private ownership to a publicly traded entity. Malaysia stands out as a compelling listing destination for companies considering an IPO. With a robust regulatory framework, diverse investor community, and vibrant capital market ecosystem, Malaysia offers a conducive environment for companies to unlock their growth potential and thrive in the competitive business landscape.

Benefits of Getting Publicly Listed

Getting your company listed on an exchange provides many benefits, some of which are:

Access to capital
By getting listed, a company can tap into a broader pool of investors in the capital market, enabling it to raise funds for company expansion, research, development, or other strategic initiatives.
Facilitate growth
Listing can provide a pathway for mergers and acquisitions, offering the company access to potential partners or targets for strategic growth and consolidation in the market.
Enhance credibility
Being listed means the company will be imposed with regulatory and reporting requirements by the stock exchange. This in turn foster transparency and good governance practices, which can enhance the company’s reputation and credibility among stakeholders.
Greater visibility and branding
Listing on a stock exchange can significantly increase a company’s visibility, boosting its brand recognition and awareness, and potentially attracting new customers, partners, and opportunities.
Incentive for employees
As a listed company, the business can offer stock options or other equity incentives tied to the company’s performance to align the interests of employees with the company’s long-term success. Employee stock ownership plan (ESOP) is a powerful tool to attract and retain talent. It can also motivate employees to contribute to its growth and profitability due to employees’ ownership in the company.
Liquidity of shares
Listing provides liquidity to existing shareholders by creating a platform where they can easily buy or sell shares, thereby widening the investor base and potentially increasing demand for the company’s stock.

Eligibility and Requirements

When it comes to IPO application and listing your company on Bursa Malaysia, there are a few things to consider:

  1. Listing Boards: Bursa Malaysia offers different boards where companies can list their shares. These include the Main Market for the listing of established companies, ACE Market which is a sponsor-driven alternative market for companies with growth prospects, and LEAP Market which is an advisor-driven market for high-growth potential companies to raise capital and access funding from sophisticated investors.. Each board has its own set of rules and requirements.
  2. Criteria: Companies must meet certain criteria to be eligible for IPO application and listing. This includes showing profitability, having a good track record, and meeting corporate governance standards such as having independent directors.
  3. Minimum Share Capital: There are also requirements for the minimum amount of share capital that a company must have for it to be listed on the exchange.

Understanding these eligibility criteria and requirements is essential for companies considering an IPO in Malaysia.

IPO application

The Listing Process

Embarking on the journey of IPO application and listing your company on Bursa Malaysia involves several important steps.

Overview of the Steps

It begins with initial planning and preparation, where the company evaluates its readiness for going public. This is followed by the submission of the IPO application to the exchange, due diligence processes, prospectus development, and eventually, listing day.

Importance of Professional Advisors

Seeking guidance from professional advisors such as investment banks and solicitors is crucial throughout the IPO application process. These experts provide valuable insights, assist in navigating regulatory requirements, and ensure compliance with listing rules.

Key Milestones During the IPO Application Process

Due Diligence Process
Companies undergo a thorough examination of their financial, legal, and operational aspects during the IPO application process to ensure transparency and mitigate risks. The company’s management team plays a key role in the due diligence process in providing accurate and comprehensive information about the company’s business, operations, financials, legal matters, and other relevant areas to the underwriters, investment banks and external advisors such as the legal and accounting firms.
Prospectus Development and Approval
The prospectus, containing comprehensive information about the company and the IPO, is prepared and submitted for approval by regulatory authorities.
Marketing and Investor Roadshows
Companies engage in marketing activities and roadshows to generate interest among potential investors, showcasing their business prospects and investment opportunities. This is typically managed by the invetsment banks or underwriter. In some cases, companies may engage external public relations or investor relations firms to assist with marketing efforts and investor communications during the IPO process.
Pricing and Allocation of Shares
Determining the offer price and allocating shares to investors are critical steps in the IPO process, balancing the company’s valuation with market demand. An experienced share registrar ensures that accurate records of these shareholders are maintained, including contact information and the number of shares held. In the distribution of shares to investors, the registrar also ensures that shares are allocated correctly according to the IPO offering terms and that investors receive the appropriate documentation confirming their ownership.
By understanding and effectively navigating through these key milestones, companies can successfully execute their IPO application and achieve their growth objectives.
Pricing and Allocation of Shares

Costs and Considerations When Applying For an IPO

Before proceeding with an IPO in Malaysia, it’s essential to consider the following:

Expected Fees for IPO Application

Companies should anticipate various fees associated with the IPO application process, including advisory fees for professionals such as investment banks and solicitors, underwriting fees if the company uses the services of an underwriter to facilitate and manage the IPO, as well as expenses related to regulatory filings and compliance.

Timeline of the IPO Process

Understanding the timeline for a typical IPO in Malaysia is crucial for effective planning. While timelines may vary depending on various factors, including regulatory approvals and market conditions, companies should expect the process to take several months from initial planning to listing day.

Additional Considerations

Tax Implications
Companies need to assess the tax implications of going public, including potential capital gains taxes and other applicable taxes during the IPO application process. Seeking advice from tax professionals is advisable to ensure compliance with tax laws and optimise tax efficiency.
Post-Listing Compliance Requirements
After listing, companies are subject to ongoing compliance requirements imposed by regulatory authorities and stock exchange rules. This includes financial reporting obligations, disclosure requirements, and adherence to corporate governance standards. Being prepared to fulfil these obligations is essential for maintaining regulatory compliance and sustaining investor confidence.

By considering these costs and additional factors upfront, companies can better navigate the IPO application process in Malaysia and position themselves for a successful transition to the public market.

Tips on Your IPO Application Process

Listing your company on Bursa Malaysia offers numerous advantages:

  • Benefits of Listing: It provides access to capital for growth, enhances visibility and credibility, and creates opportunities for expansion and strategic partnerships.
  • Importance of Careful Planning: Successful IPOs require thorough planning and preparation. Companies must assess their readiness, adhere to regulatory requirements, and engage professional advisors to navigate the complexities of the process.
  • Professional Guidance: Seeking guidance from experienced professionals, including investment banks and legal advisors, is crucial for a smooth and successful IPO
  • Alternative Fundraising Options: For companies not yet ready for an IPO, there are alternative fundraising options to consider. These may include private equity investments, venture capital funding, or debt financing. Each option offers its own benefits and considerations, providing companies with flexibility in their capital-raising strategies.

By weighing the benefits, planning meticulously, and seeking professional support, companies can leverage the opportunities presented by listing on Bursa Malaysia to fuel their growth and achieve long-term success in the dynamic business landscape.

    IPO Application Process

    BoardRoom's Expert IPO Application Services

    When it comes to navigating the intricate process of IPO application in Malaysia, BoardRoom emerges as a trusted partner. With more than 50 years of experience and expertise in corporate services, BoardRoom offers comprehensive support and guidance tailored to meet the unique needs of companies venturing into the IPO landscape. From ensuring regulatory compliance to facilitating due diligence and prospectus development, our team of seasoned professionals is dedicated to orchestrating a seamless IPO journey.

    As a full-suite share registry provider, we also provide services such as corporate action services, share registry maintenance and coordination, AGM meeting and scrutineering services , corporate secretarial and corporate governance advisory services.

    Contact us today to help your business navigate the complexities of the IPO application process and increase the chance of successfully listing on Bursa Malaysia.

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