Why many large IPOs tumble

IPOs should be priced at least at a 20% discount to what industry peers are trading at and companies should also “have a sustainable strategy post-IPO to provide an upside for the share price to increase over time”. — Image by Gray StudioPro on Freepik

MALAYSIA’S initial public offering (IPO) market is sizzling. The country came out tops for IPOs in South-East Asia in the first half of this year, with US$450mil (RM1.97bil) raised from new offerings.

But all is not rosy. One fact that troubles investors more often than not, is that a number of large offerings have failed to deliver.