IPO in Bursa Malaysia: What It Is, How to Apply & Investor Strategy
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
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IPO (Initial Public Offering) investing is one of the most popular ways for Malaysian investors to generate profits on Bursa Malaysia. In 2025, a total of 60 companies were listed on Bursa Malaysia - the best record in 20 years. For 2026, more than 50 companies are in the pipeline with a target market cap of RM28 billion.
This article is a comprehensive guide to IPOs in Malaysia - from the basics to advanced strategies. Whether you are a new or experienced investor, you will understand how the IPO process works, how to apply, and how to evaluate whether an IPO is worth investing in.
IPO stands for Initial Public Offering - the process where a private company offers its shares to the public for the first time through a stock exchange. Before an IPO, the company is owned by founders, early investors, and private shareholders. After an IPO, anyone can buy and own shares of the company through Bursa Malaysia.
In short, an IPO is an opportunity for you to buy shares of a company at the offer price before it begins trading publicly. If the company is of high quality and receives strong demand, the share price typically surges on the first day of listing - giving immediate profits to investors who successfully received an allocation.
For a more detailed explanation of basic IPO concepts, read our article: What Is an IPO or Initial Public Offering?
Companies choose to do an IPO for several key reasons:
Raising capital - The most important purpose. Funds raised through the IPO are used to expand the business, build new factories, increase production capacity, or make strategic investments. For example, Ambest Group Berhad's IPO raised capital to expand precision machining operations in the semiconductor sector.
Paying off debt - A portion of IPO funds is often used to reduce the company's debt burden, making the balance sheet healthier.
Providing an exit for early investors - Founders and venture capital investors can sell part of their holdings through the IPO to realize profits.
Enhancing profile and credibility - Companies listed on Bursa Malaysia gain higher visibility, making it easier to conduct business with corporate and government clients.
Bursa Malaysia has two main boards for IPOs:
The Main Market is for larger, more established companies. Listing requirements are stricter, including minimum profit track records and higher market capitalization. Examples of Main Market companies include Eco-Shop Holdings, which was the sole Malaysian representative in the Top 10 largest Southeast Asian IPOs of 2025.
The ACE Market is for smaller growth companies with high potential. Listing requirements are more flexible, allowing start-ups and SMEs to access the capital market. Most IPOs in Malaysia are listed on the ACE Market. Example: TeamStar's IPO on the ACE Market.
The LEAP Market is a specialized market for small and medium enterprises (SMEs). It is only open to sophisticated investors and not for regular retail investors.
The IPO process from an investor's perspective involves several important stages. Understanding the key dates in the IPO process helps you plan your application more effectively.
The Securities Commission Malaysia (SC) approves the IPO prospectus. The company announces the offer details including the IPO price, number of shares offered, and key dates.
Investors can apply for the IPO within the designated period, usually between 5 to 7 working days. Applications can be made through:
If applications exceed the shares offered (oversubscribed), a balloting process is conducted. Not all applicants will successfully receive an allocation. Highly popular IPOs like Kee Ming Group which was oversubscribed 54 times means the chances of receiving an allocation are very low.
The registrar announces the balloting results. If successful, shares will be credited to your CDS account. If unsuccessful, your application money will be refunded to your bank account within a few working days.
Shares begin trading on Bursa Malaysia. The opening price may be higher or lower than the IPO price. Not all IPOs are profitable on the first day - for example, One Gasmaster's IPO opened below the offer price.
Before applying for an IPO, make sure you have:
This is the easiest and fastest method:
Bumiputera investors are eligible to apply through two channels:
An IPO prospectus is the official document containing all information about the company and the IPO offer. It is mandatory reading before making an investment decision. You can download the prospectus from the Securities Commission Malaysia or Bursa Malaysia websites.
Company summary - What is the company's core business, where does it operate, and who are its main customers.
Financial data - Profit and loss records for the past 3-5 years, balance sheet, and cash flow statement. Look at the trends - are profits increasing every year?
Use of IPO proceeds - How the company plans to use the funds raised. Avoid companies that use most of the proceeds to pay off debt without a clear growth plan.
Risk factors - Every prospectus is required to list risks. Read this section carefully - it tells you what could cause your investment to lose money.
Promoter information - Who are the founders and major shareholders. Analyzing promoters and major shareholders is important because management quality affects the company's performance after listing.
Valuation - Check the PE Ratio compared to peer companies (peer comparison). A PE Ratio that is too high means you are paying a high premium.
Not all IPOs are profitable. Here are strategies that can help you make better decisions:
Only invest in IPOs whose business you understand. If you cannot explain what the company does in one sentence, it may be better not to invest.
Choose companies with a consistent profit track record of at least 3 consecutive years. Avoid companies that have only recently turned profitable after years of losses.
A highly oversubscribed IPO indicates strong investor interest. However, this also means your chances of receiving an allocation are low. Conversely, an IPO with weak demand may have issues that other investors have already identified.
Decide whether you want to:
For more detailed strategies, read 6 Ways to Minimize IPO Investment Risk.
Don't put all your capital into one IPO. Spread your applications across several IPOs to increase your chances of receiving an allocation and reduce risk.
For Muslim investors, make sure the IPO is Shariah compliant. This information is usually stated in the prospectus.
IPOs are not risk-free investments. Here are the main risks you need to understand:
Price drops below IPO price - Not all shares rise on listing day. Some fall and continue to decline for months. This happens especially when the IPO valuation is too high or market conditions are unfavorable.
Limited information - Compared to long-established listed companies, IPO companies have a short market track record. You rely entirely on the data in the prospectus.
Lock-up period - Promoters and major shareholders are usually prohibited from selling their shares for a certain period (6-12 months). When the lock-up expires, selling pressure can cause the price to drop.
Excessive hype - Some IPOs receive excessive publicity that may not reflect the company's true value. Don't get carried away by hype without doing your own research.
For a more in-depth risk analysis, read Stock & IPO Investment Risk Analysis.
The year 2026 marks a new phase for the Malaysian IPO market. Under new leadership, Bursa Malaysia is shifting its focus from quantity to quality - targeting large IPOs with high market caps rather than a high number of listings.
Some important trends for 2026:
RM28 billion market cap target - Bursa Malaysia is targeting RM28 billion in new market capitalization from IPOs, compared to focusing on the number of listed companies.
Technology and semiconductor sector - Malaysia continues to attract technology companies to list, driven by data centre investments and a growing semiconductor ecosystem.
Bumiputera IPOs strengthened - A collaboration between Bursa Malaysia and TERAJU to strengthen Bumiputera IPOs with the goal of increasing participation in the capital market.
Free float issue - Discussions about the need for sufficient free float to ensure trading liquidity after listing. Bursa Malaysia has given assurance that this is not a major issue.
Use this checklist before making an IPO investment decision:
The minimum application is 1 lot (100 units). Depending on the IPO price, the minimum capital can be as low as RM5-RM50. However, for better allocation chances, most investors apply for 5-10 lots.
You can monitor IPO announcements on the Bursa Malaysia website, the SC portal, or follow mahersaham.com which publishes reviews for every new IPO on Bursa Malaysia.
No. A CDS account is mandatory as it stores your share ownership records electronically. You can open a CDS account online through a licensed broker.
Your application money will be fully refunded to your bank account, usually within 3-5 working days after the allocation results are announced.
Oversubscribed means the total applications exceed the number of shares offered. Example: oversubscribed 10 times means demand is 10 times higher than supply. The higher the oversubscription rate, the harder it is to receive an allocation.
There is no minimum holding period. You can sell IPO shares on the first day of listing if you wish. However, if you are confident in the company's prospects, holding for the long term may provide better returns.
No. Some IPOs fall below the offer price on the first day and may continue to decline. Studies show that on average, approximately 70-80% of IPOs on Bursa Malaysia are profitable on the first day, but this is not guaranteed.
The Main Market is for large, established companies with strict listing requirements. The ACE Market is for smaller growth companies with more flexible requirements. Investment risk in the ACE Market is usually higher as companies are still in the growth phase.
IPOs are an attractive investment opportunity but require thorough research. The key to successful IPO investing is reading the prospectus, understanding the company's business, and having a clear exit strategy. Don't get carried away by hype - make decisions based on data and facts.
If you are just starting out in investing and want to join the world of IPOs, the first step is to ensure you have an active trading account.
Open a CDS Trading Account to start investing on Bursa Malaysia through the trusted M+ Online platform.
Download the Free Stock Market Basics Ebook for a step-by-step guide to starting your first investment.