Navigating the IPO Process in Malaysia: Some Key Pointers

In this guide, we walk you through the key steps and consideration for a successful IPO in Malaysia.

1. Preparing for the IPO Journey

Before embarking on an IPO process, companies need to ensure they are well-prepared with a solid business plan, clear growth strategy, and a strong (professional) management team. It's also important to assess the company's financial reporting capabilities while ensure compliance with corporate governance standards.

2. Assembling the Right Team

A successful IPO require the expertise of various professionals. Companies need to appoint an investment bank as the principal adviser, along with legal counsel, accountants, market researchers, et. al. These advisors play a crucial role in guiding the company through the IPO process, from structuring the offering to conducting due diligence.

3. Due Diligence and Drafting the Prospectus

Conducting thorough due diligence is essential to ensure there are no inaccuracies in the IPO documents. The prospectus, a key document in the IPO process, must include detailed information about the company's business, financials, and risks. It's important to work closely with your advisers to prepare a comprehensive and transparent prospectus.

4. Regulatory Consultation and Submission

In Malaysia, it is mandatory to consult the Securities Commission Malaysia (SC) before applying for an IPO on the Main Market. For listings on the ACE Market, consultation with Bursa Malaysia is strongly encouraged. After addressing any queries from regulators, the formal application, along with the prospectus, is submitted for approval.

5. Meeting Listing Criteria

To list on Bursa Malaysia, companies must meet specific quantitative and qualitative criterias. This include demonstrating a profit track record, achieving a minimum market capitalization, and adhering to corporate governance standards. For foreign companies, additional requirements apply, such as being incorporated in a jurisdiction with equivalent regulatory standards.

6. The Listing Process and Fees

The IPO process culminates in the listing of the company's shares on Bursa Malaysia. Companies must decide on the equity structure and method of offering their shares. Listing fees vary depending on the market (Main Market, ACE Market, or LEAP Market) and are based on the market value of the securities to be listed.

7. Post-IPO Considerations

Once listed, companies must comply with ongoing listing obligations, such as maintaining a certain level of shareholders' equity and adhering to financial reporting standards. It's important to continue demonstrating transparency and good corporate governance to build trust with investors.

By understanding the regulatory landscape and working closely with experienced advisors, companies can navigate the IPO journey successfully.

For businesses considering an IPO in Malaysia, LedgerBrains offers experienced accounting and finance related advisory services to guide you through every step of the process. Contact us today to learn how we can help you achieve your listing goal.