KUALA LUMPUR: While many companies pursue an initial public offering (IPO) to raise funds, experts at Credit Guarantee Corp Malaysia Bhd’s (CGC) “On the Road to IPO” programme said the real challenge lies in the years of preparation required beforehand.
This would generally include corporate restructuring, stronger governance and building systems that can withstand the scrutiny of public markets.
CGC president and chief executive officer Mohamed Nazri Omar said Malaysia’s economic resilience has long been anchored by the ambition, innovation and determination of its business community.
“As businesses grow, scale and evolve, access to sustainable sources of capital, stronger governance frameworks and greater market visibility become increasingly important,” he said at the event yesterday.
During a fireside chat at the “On the Road to IPO” programme, panellists said as Malaysian businesses drive the next phase of growth via the listing route, it was less about raising funds and more about building market credibility, governance and sustainable growth.
“Put strong corporate governance in place from the beginning, and bring in independent directors early so they have time to understand your business and contribute meaningfully to its development,” said Bursa Malaysia Bhd
director of securities market Leong See Meng.
He said the IPO (initial public offering) process forces a company to become more systematic, disciplined and transparent.
“Those improvements do not end at listing – they prepare you for the responsibilities that come afterwards,” he said.
The discussion further highlighted that the IPO value ultimately extends beyond raising capital, as a significant aspect includes enhancing the company’s credibility and visibility among customers, regulators and investors, creating a stronger market perception.
“Beyond funding growth organically, you can raise capital through exercises such as rights issues, bringing shareholders along on your growth journey rather than relying solely on retained earnings,” PEOPLElogy Bhd founder and managing director Allen Lee said.
Simultaneously, businesses are provided with better strategic flexibility, enabling them to raise additional funds through capital market exercises and use listed shares as a tool for acquisitions, supporting expansion and long-term growth.
The panellists said listings are not without its challenges, adding that more often than not, companies underestimate the preparation process required before it begins.
They shared that anyone considering a listing should start restructuring early as listing fees can be substantial.
The discussion also explored how an IPO can serve as an effective succession planning tool for family-owned businesses.
The panellists said by strengthening governance and institutionalising operations, a listing helps ensure business continuity beyond the founding generation.
The discussion noted that IPOs can enable families to separate ownership from management, allowing professional executives to run the company while ownership remains within the family through structures such as trusts, reducing succession-related conflicts and supporting long-term sustainability.
Meanwhile, the government has allocated RM50mil under the PKS@Bursa programme to help 200 high-potential small and medium enterprises (SMEs) to list on Bursa Malaysia by 2030.
Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong said the programme, implemented through SME Corp Malaysia, aims to build a stronger channel to produce more companies ready for future listing.
“Through the initiative, eligible companies can access the SME Listing Fund, which offers financing of between RM2mil and RM5mil at a profit rate not exceeding 5% for up to five years,” he added.
“Companies that participate in PKS@Bursa are eligible to receive a rebate of up to 20% if they are successfully listed on Bursa Malaysia within five years.
“This will help reduce listing expenses and encourage more high-potential SMEs to access the capital market,” he told the media after launching PKS@Bursa and officiating the “Road to IPO” programme.
Sim said the funding can be used for working capital, corporate financing needs and expenses related to public listing preparations, helping companies manage the costs involved in the listing process.
“PKS@Bursa supports the government’s aspirations under the 13th Malaysia Plan to strengthen the country’s capital market ecosystem and expand access to growth financing for local enterprises. Our goal is not just to produce more listed companies, but to produce more companies that possess the capacity to be listed. PKS@Bursa is one of the paths to realise that goal.”
SME Corp will collaborate with CGC, Bursa Malaysia and several other agencies to provide guidance and support to SMEs interested in participating in the programme, Sim added.
The “Road to IPO” seminar was organised by CGC and the Malaysian Consortium of Mid-Tier Companies.
