Page 37 - Introduction To Investment Management

2.3.2 The reasons for IPO
There are two methods which you can apply for an IPO, either through application forms

(at issuing houses, stockbroking companies and financial institutions) or through an

Electronic Share Application (ESA) that allows applications via ATMs. Most of corporations
or businesses chose to ‘go public’ by issuing Initial Public Offering as: -

i. Alternative source of financing
An alternative financing option from conventional bank loans, which are costly
and require fixed terms of repayment.

ii. Ability to grow
Growth opportunities with new capital outlay generated from issuing common
stock.

iii. Enhance image and status of company

Preference often given to listed companies in awarding major projects as they are
generally viewed to be more stable and financially viable than privately held
companies.

iv. Enhanced Liquidity
Liquidity of securities greatly enhanced since quoted securities are easily tradable
and potentially trades at premium. Quoted securities tend to be accepted by
lenders as collateral.

v. Ability to attract and retain quality employees
Companies can attract and retain quality staff and professionals.

Table 2.5: The IPOs in Bursa Malaysia in year 2012

NAME OF COMPANY OFFER ISSUE NO OF SHARES LISTING DATE OF
(Stock Code / Stock PERIOD PRICE SOUGHT LISTING

Short Name) (Per
Opening Public Offer Private
Ordinary
Issue For Placement
Share)
(Mil) Sale (Mil)
(Mil)

Astro Malaysia 21-09-12 RM 3.00 Main 19-10-
Holdings Berhad - - Market 2012
- Retail Offering 259.8 1,044 (Trading /
- Institutional Offering Services)
(6399/ASTRO) 214.4

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