Every founder I meet has pictured the gong at Bursa. The photographs, the congratulatory adverts, the word “Berhad” on the letterhead. Listing is the Malaysian entrepreneur’s graduation day.

This week I sat with the numbers behind that picture. They made me ask a question our industry rarely says aloud: is going public really the right route for most of the companies now queuing to do it?

Bursa is enjoying a busy season. By late July there had already been 41 listings in 2026, 29 of them on the ACE Market. The pipeline is healthy. But a busy gate does not tell you what happens to people after they walk through it.

The real ticket

Consider a hypothetical ACE Market candidate, used here purely for illustration: about RM9 million in annual profit, valued at 12 times earnings, so roughly RM108 million at listing. It offers 30% of its shares to the public and raises about RM21.6 million in new money.

The quoted bill to get there is about RM4 million. Advisory fees alone run to RM1.5 million. Lawyers, reporting accountants and the independent market researcher add roughly RM1.4 million to RM1.6 million more. Then come underwriting, the sponsor, the issuing house and the share registrar, before printing, regulators’ fees and a contingency.

But the quoted bill is rarely the real one. Placement fees, charged at up to 2.5% of every share placed, are easy to overlook in the proposal. More significant, many founders hire a financial consultant to steer them through the process, and these consultants commonly charge 2% to 3% of the market capitalisation at listing. On a RM108 million company, that is another RM2.2 million to RM3.2 million.

Add it up and the real cost is closer to RM6 million to RM7 million: around 30% of the RM21.6 million the company actually raises. If the market prices the company at 10 times earnings rather than 12, new money falls to about RM18 million while most costs barely move, and the share climbs past a third.

And the bill does not stop at listing. The ACE Market requires a sponsor for years after the debut. Audit, compliance, investor relations and company secretarial fees all rise, and as I wrote last week, tighter governance standards will push them higher still. A listed company pays rent every year for its place on the board.

Under water

The after-market record is sobering. Writing in The Edge in April, one analyst found that roughly two in three companies listed in 2025 ended the year below their IPO price, on both the Main and ACE Markets. Worse, 57% to 61% of the 2023 and 2024 cohorts reported lower profit in the year after listing than before it.

A more recent tally of 57 Main and ACE listings between September 2025 and September 2026 tells a similar story: about 58% trade below their issue price, and the median return is around minus 11.5%. Yet about one in five has doubled. The average looks flattering only because a handful of winners carry everyone else.

The reasons are not mysterious. Companies list at peak profit to maximise valuation. Prices are set on a single earnings multiple of past results. And the advisers are paid on completion, not on how shareholders fare a year later. Investors notice, and the next issuer pays for it in a lower valuation.

Larger SMEs in public clothing

Look closely at who is listing. Most of this year’s debutants are on the ACE Market, and many of them are, in truth, larger SMEs. They are good family businesses with single-digit or low double-digit millions in profit, a founder at the centre, and a customer base that is often concentrated.

There is nothing wrong with that. But it matters, because the public market is a demanding landlord. It wants growth every quarter, disclosure of every major contract, and a board that answers to strangers. A mid-sized firm with lumpy orders and a lean finance team can struggle to carry that weight.

The founder also gives up more than the bill shows. Flexibility to take a long view. Privacy over pricing and margins. Time, as management is pulled into compliance and analyst meetings. And when the share price slides below the IPO price, the founder’s reputation and the morale of employees who bought pink-form shares slide with it.

Is it the right route?

I am not against listings. I have spent much of my career helping companies prepare for them, and for the right business an IPO is transformative. It brings permanent capital, a currency for acquisitions, discipline, and a name that banks, customers and talent respect.

But for many larger SMEs, the honest answer may be “not yet”, or “not this way”. Before calling the bankers, I would ask a founder five questions:

1. Why do you need public money? If the answer is a single factory or a working capital gap, a bank facility or a strategic investor may cost far less than RM6 million.
2. Is this your peak or your platform? If profit is at a cyclical high, the market will find out within a year.
3. Can you carry the annual rent? Budget for listed-company costs for at least five years, not just the debut.
4. Have you tried the steps in between? Private equity, a strategic partner, or the LEAP Market can test readiness at lower cost.
5. Would you buy your own shares at the IPO price? If you would not, neither will the market for long.

A listing should be the start of a story investors want to keep reading, not the climax of the founder’s. The gong sounds once. The obligations ring for years.

References:

• IPOs on Bursa: Priced to sell, not to perform, The Edge Malaysia, 27 April 2026.
• Healthy IPO pipeline to face tougher investor demands in 2H, The Edge Malaysia, 3 August 2026.
• Malaysia IPOs: 58% are below issue price — yet 21% have doubled, Atlanticryx, moomoo Community, September 2026.
• Note: The company, valuation and cost figures in this article are hypothetical examples drawn from general market practice. They do not refer to, and should not be taken to imply, any specific company, adviser or transaction.

Dr Paul PK Lim is the de facto towkay of Accoris Management Sdn Bhd, and he loves to daydream.