Written by The Banking Post
No new initial public offering (IPO) proposals are expected to reach regulators for at least five more months, as companies grapple with stricter rules and time-consuming financial reporting requirements.
Under the revised public issue rules, effective from December 30, firms can submit IPO proposals using audited annual, half-yearly, or quarterly financial statements. In practice, however, most companies rely on audited annual accounts—now proving a bottleneck.
Companies following the calendar year have until April 28—within 120 days of year-end—to submit proposals. But market insiders say that timeline is unrealistic.
“It’s not possible to get financial statements audited within a month,” said a market expert, pointing to the lengthy process of preparing, auditing, and securing board approval for financial reports. Altogether, this can take at least two months after year-end—pushing IPO submissions further down the line.
As a result, companies aiming to go public based on FY26 financials may have to wait at least five more months before applying.
The slowdown also reflects broader economic challenges. Many firms are still recovering from macroeconomic pressures that have weighed on profitability—an essential factor in IPO valuation.
“A company will not be keen on going public unless it experiences profit growth,” said another market insider.
The drought in new listings has already been prolonged. The last IPO proposal came in March 2024, with no new entrants to the secondary market since then.
Despite the delay, the revised rules aim to streamline the process. The securities regulator now has a fixed timeline—20 days for approval under the fixed-price method and up to 53 days under the book-building method—significantly shorter than the previous system, where approvals could take over a year.
The updated framework also allows companies to use multiple valuation methods and set higher premiums based on fundamentals, addressing earlier concerns over pricing caps.
Still, until corporate earnings stabilise and financial reporting cycles align with the new rules, the IPO pipeline is expected to remain largely inactive.
