IPOs on the rise

IF investors believe the ACE Market has seen numerous listings in recent years, the activity is only intensifying.

Year-to-date, it has recorded 37 new listings, with at least three more expected in November alone.

The Main Market and Leap Market have also contributed, adding seven and three new listings, respectively, this year.

Despite the significant volume of companies going public, post-listing performance has been mixed.

While many enjoyed strong debuts with oversubscription and first-day gains, broader market challenges – such as foreign fund outflows and tariff uncertainties – have caused a general post-debut pullback.

This raises questions about the quality of these listings and the valuations at which they are entering the market.

Malaysia’s initial public offering (IPO) market is thriving, with banks highlighting a notable shift up the value chain. According to Christopher Ng, chief executive officer (CEO) at AmInvestment Bank, the country remains a leader in Asean IPO activity by volume, with 45 listings recorded as of Oct 27 and projections to reach 60 by year-end.

This momentum reflects robust domestic capital formation and strong participation from small and medium enterprises (SMEs), particularly on the ACE Market.

While deal sizes are smaller compared to Singapore, the quality of listings has improved significantly, with issuers now active in high-value sectors such as data centres, advanced manufacturing, renewable energy and healthcare, marking a clear advancement up the economic value chain.

For context, IPOs on the Singapore stock exchange have raised approximately US$1.5bil in funds up to Sept 30, with local debutants collecting marginally more than US$1bil. Indonesia, the most active market for new listings in recent years, has had 22 IPOs up to September, raising close to US$1bil.

Companies aspiring to list on Bursa Malaysia undergo a rigorous evaluation process that incorporates both quantitative and qualitative criteria.

These include a strong financial track record, sustainable business growth, experienced management, robust corporate governance, and a clear, value-accretive IPO plan.

The local bourse emphasises that each successful IPO reflects comprehensive due diligence to ensure these standards are upheld.

“The number of listings and proceeds raised to date highlight the quality of companies entering the public market, bolstering investor confidence and reinforcing the credibility of Bursa Malaysia’s listing ecosystem,” it says.

More importantly, Ng says the evolution of Malaysia’s IPO sphere, especially this year, means companies are no longer competing on cost or capacity alone, but also on technology, innovation and export-driven specialisation, positioning Malaysia more firmly within regional and global supply chains.

He acknowledges that Malaysian banks are demonstrating a healthy appetite for IPOs in 2025, particularly in backing high-growth emerging companies and are far more proactive in supporting SMEs in their journey to list.

He says: “We recognise that these emerging companies are now driving the next phase of Malaysia’s capital market growth.

“We are investing heavily in our own human capital, structuring capabilities and sector expertise to better guide companies through the IPO process.”

Furthermore, this includes strengthening AmInvestment Bank’s advisory teams, enhancing due-diligence capabilities, as well as building long-term relationships that help clients institutionalise and eventually graduate to the Main Market.

The shift reflects a strategic move from transactional underwriting to relationship-driven capital formation and long-term pipeline development.

According to Ng, an Economics graduate and chartered financial analyst, this evolution is driven by factors such as a more efficient regulatory framework, faster listing processes and increased liquidity in the ACE Market, supported by strong domestic participation.

Ng also notes that Malaysia’s capital market has evolved significantly to support emerging companies, with Bursa Malaysia likely to continue seeing new listings on the ACE Market as more smaller companies go public.

“High-growth companies, especially in tech, advanced manufacturing, and renewables, can access capital earlier, expanding the number of listed companies. Equity fundraising from the public market is no longer limited to large, established companies.”

Sentiment remains positive, as foreign investors view the Malaysian market as stable and attractive. However, their focus has shifted towards quality and growth companies.

Ng concedes that the more measured participation of Main Market listings this year is understandable, given global macro uncertainties that have prompted large issuers to adopt a cautious approach to timing and valuation.

Encouragingly, several sizeable IPOs are already in the pipeline, with expectations of a healthy rebound in Main Market activity once global conditions improve.

“In this sense, the current ACE Market-led cycle is less a sign of weakness, but more a reflection of timing and prudence.

“Once macro conditions improve, we expect to see a healthy migration of matured ACE companies and deferred large IPOs onto the Main Market,” says Ng.

The financial services veteran believes Malaysia does not need to prioritise large Main Market IPOs as an end in itself, as the IPO landscape is healthy and sustainable, although it must continue to evolve.

Additionally, while the ACE Market has proven to be an effective platform for emerging companies to access growth capital, the long-term strength of Malaysia’s capital markets depends on how well investment banks help these companies scale, mature and eventually transition to the Main Market.

“Sustaining this momentum requires three things: a clearer graduation pathway for ACE companies to Main Market, deeper institutional participation to improve liquidity and valuations, and stronger post-listing support through research and governance,” says Ng.

The local bourse says the there is healthy investor interest and participation across both ACE Market and Main Market segments, with investors recognising the potential that companies at different stages offer.

“The current multi-tiered structure is strategically designed to serve as an enabler of Malaysia’s economic growth by offering appropriate capital-raising platforms for businesses, regardless of their size,” it says.

“We will continue to work closely with stakeholders to leverage national policies in driving large, high-impact listings from priority sectors including companies in the semiconductor industry.”

Nor Masliza Sulaiman, CEO and regional head of investment banking, CIMB Investment Bank Bhd, says the high number of IPOs on Bursa Malaysia shows a very active primary market and indicates healthy investor demand for new issues, particularly among retail investors who tend to drive smaller-cap IPOs.

“Malaysia is becoming a preferred fund-raising hub for emerging businesses and reflects confidence in liquidity, valuation environment and post-listing performance.

“In 2024, CIMB Investment Bank was ranked first among investment banks in South-East Asia based on funds raised from IPOs and follow-on transactions.”

This included three IPOs on the Main Market, raising over RM3.5bil for issuers and shareholders, and helped to contribute to the overall performance of the Exchange.

Nor Masliza feels increasing Main Market listings can deepen institutional participation and attract more foreign capital.