How to apply for IPO (Initial Public Offering)

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IPO or Initial Public Offering is the first step into bringing a company to public listing where it will be able to inject additional capital and funds for expansion and growth of the company. Under Bursa Malaysia, depending on the size and turnover of the company, owners can choose between listing in the Main Market or the ACE Market. The Main Market in Bursa Malaysia are the most common share trading market where companies which are established and with higher turnover in terms of revenue and assets are listed while the ACE Market is intended for companies with good growth potential and the emerging markets.

There are regulations and guidelines stipulated by Bursa Malaysia if anyone would like to bring the company public through IPO and generally there are 2 methods to do so. Many investors will tell you that buying IPO shares would in most cases be profitable as the shares are sold at a lower price as compared to when it actually goes public. To apply for IPO, you can do so through the parties involved that include issuing houses, financial institutions as well as stock-broking companies who would be able to assist you as they are the experts in this matter. But before you do so, you must ensure that you are well aware of the following factors like being aware of your risk profile and to have sufficient additional funds.

Basically, applying for IPOs are very straightforward where you will have to fill up a form and then follow the instructions as stipulated. You must ensure that the details provided in the form are the same as in your identity card as any anomalies will deem the application void. Then, you will be required to attach an order payment slip from the bank which must be the amount to the shares you are applying for and then the applications can either be posted or directly to the issuing house concerned.

There are certain instances when some IPOs can be applied through the Electronic Share Application (ESA) facility which are provided through the ATMs (Automatic Teller Machines) of the financial institutions which are involved.

To apply through the ESA, you must first obtain either one of the following, a savings account, a CDS or Central Depository System account and an ATM card. The ATM will usually require you to key in your pin number; the CDS account number and the IPO Stock code. This means that you must have the entire relevant information ready prior to applying through the ESA. Once you have done that, you need to keep the transaction for future references. You will be informed whether or not your application is successful when the company’s share is listed.