What Is an IPO? Guide to Stock IPOs in Malaysia (2026)

Did you know that the stocks that investors regularly buy and sell on trading platforms are in the secondary market? When a company wants to be listed on Bursa Malaysia for the first time, it must go through an Initial Public Offering (IPO) first.

Every company that wants to conduct an IPO must obtain approval from the Securities Commission Malaysia before it can proceed. When evaluating an IPO proposal, the Securities Commission will review the overall suitability of the company making the IPO.

Once approved, the company is required to publish a prospectus that explains the company and its owners, its business activities, the company's performance, and future projections.

Why Do Companies Launch IPOs?

There are many reasons for companies to issue new shares, including obtaining additional financing to pay off debts, increasing working capital, or funding company investment projects.

For the latest information on IPOs, you can refer to Bursa Malaysia's official website at the IPO Summary page. There you can find the list of companies offering IPOs along with their expected listing dates and estimated offer prices per unit.

Shariah Status of IPOs

For your information, every newly listed IPO does not yet have a Shariah-compliant status. So if you want to know whether a company runs a halal business or not, you need to refer to their Prospectus. Additionally, the Shariah status of an IPO can be checked through the broker BIMB Securities Sdn Bhd. If you have any questions, consult your remisier for further details.

Importance of Studying the Prospectus Before Buying IPO Shares

As always, before making any decision to buy shares, you need to do your research first — whether it's fundamental or technical analysis. Since IPO shares are new and have no technical chart history, you have no guidance for analysing stock price movements.

So the alternative is to conduct fundamental analysis based on information from the prospectus. Key information you should study includes:

Business Information — What is the company's business?
Financial Information — Consider the company's past financial performance and future financial projections
Shareholders, Directors, and Management — Who are the people running the business?
Risk Considerations — Is the proposed investment safe? In this section, the company will describe potential risks that may be faced in their business.

Prospectus Study Example

This is an example of a prospectus for Tri-Mode System (M) Berhad, which was scheduled for IPO on 14 May 2018. As you can see in the image, the prospectus date was 18 April 2018, approximately one month before the listing.

Prospectus documents are usually thick. For Tri-Mode alone, it had nearly 200 pages. But don't worry — you don't need to read everything. As we shared earlier, you only need to look at the business information, financial information, board of directors and company management, and risk projections.

So head to the Table of Contents to find the important sections. This way, you can save time and decide whether or not to apply for that IPO.

Conclusion

Risk exists in any form of investment, including IPO purchases. The price may go up or down on the first day of listing on Bursa Malaysia. What matters is that you've done your research and have your own trading plan so you can invest with controlled risk. To learn more about IPOs, visit the mahersaham.com blog.

Learn IPO From A to Z

This article is just the beginning of your IPO learning journey.

Below is a curated list of articles we've compiled about IPOs. Feel free to bookmark this page for easy reference in the future.

Is the New IPO Company Shariah-Compliant?
Study of Past IPO Performance
How Much Capital to Apply for an IPO?
How to Find New IPO Prospectuses
How to Activate Your MITI Account (New System)
How to Apply for IPO via MITI for Bumiputera
How to Check MITI Application Status
How to Accept/Reject MITI IPO After Success
How to Apply for IPO via Maybank
Buy IPO at Maybank — Using Maybank2u
How to Apply for IPO via CIMB Online Banking
How to Apply for IPO via Public Bank Online Banking
How to Read & Understand Balloting Results
IPO Stock Status — Stock Market Terms
How to Check IPO Results

FAQ (Frequently Asked Questions)

What is an IPO (Initial Public Offering)?

An IPO is an initial public offering where a private company sells its shares to the public for the first time. It takes place in the primary market before the shares begin trading on the secondary market (Bursa Malaysia).

What is the difference between primary market and secondary market?

The primary market is where shares are sold for the first time through an IPO, while the secondary market is where listed shares are traded between investors. Daily buying and selling activity on Bursa Malaysia occurs in the secondary market.

How do I apply for IPO shares?

You can apply for IPOs through online banking such as Maybank2u, CIMB Clicks, or Public Bank. Bumiputera can also apply through MITI for a special quota. Make sure you have a CDS account before applying.

Is IPO investing suitable for beginners?

IPOs can be a good starting point as the offer price is usually lower. However, beginners should read the prospectus and understand the risks before applying. Not all IPOs are profitable on the first day of listing.

Understanding the IPO process from A to Z helps you take advantage of early investment opportunities — start by opening a CDS account.

Open a CDS account to be eligible to apply for IPO shares and start investing on Bursa Malaysia — Open a CDS Trading Account now.

Get the free stock market basics ebook to understand the capital market and the IPO process — Download free ebook here.