An Initial Public Involves Offering (IPO) is a private company’s first attempt to ‘go public’. The actual process is an unlisted company offering new or existing shares that can be bought or sold by the public, including existing shareholders.


Prior to an IPO, a private company, with fewer shareholders, typically consisted of certified investors (such as venture capitalists, ‘angel’ investors and high-value individuals) and early investors (such as those setting up businesses, family members and friends. them). After the IPO, the company became a public company listed on a regulated stock exchange.

An IPO is a huge success in the life of a company. The most common reason for a public listing is to raise more capital to grow or improve a company’s business. Companies sometimes go public to allow existing shareholders to generate profits from their investments, to reward their employees by offering equity or simply to create the appearance of a name, profile and credibility.


So, if you are interested in an IPO, how can you apply for an IPO?


Interest in IPOs

Whether you’re an experienced investor or a new investor, you’ve probably heard ‘IPOs’ and ‘good returns’ mentioned together more than a few times. This is not surprising because, when a private company promises a public listing, the chances of making a profit from buying IPO shares are indeed high. If a company’s growth prospects are seen well by the investment community, first public shares are most likely to be in high demand, especially since IPOs are typically discounted to ensure early sales. Therefore, it is not uncommon for the value of IPO shares to increase rapidly when available on the stock market. This makes IPO shares a ‘hot property’ and causes investor interest in IPOs to remain high.


Then, another reason for the high interest in IPOs is investor confidence in the authorities, including market regulators. The strict guidelines and valuation process that must be gone through prior to public listing convince investors that an IPO is a credible investment opportunity.

Companies that decide to go publicly have to go through a rigorous screening process by submitting complex documentation to the Securities Commission Malaysia (SC) through the issuing bank. Further, the company’s prospectus – which sets out in detail the company’s profile, core business, management, financial position, corporate strategy, number of shares and share price, dividend forecast, risk, etc. – needs to get approval at some level of strict authority scrutiny.


Although the listing requirements are so complicated, more and more companies are deciding to be listed publicly. The chart below shows that both the trading volume and the volume of Public Listed Companies are increasing. Nft news site is here. 


Remembering Your Objectives To Invest


Being cautious and making informed decisions is always beneficial when considering any investment method and it is no different than an IPO. What looks attractive or promises high returns may not always be true after due diligence is done thoroughly.


Before you apply for an IPO, do your inspection, survey the company and the business sector in which it operates and analyze the future prospects not only for the company but also for the entire market.


Remember, it is your money.