Funds raised across 136 initial public offerings (IPOs) in Southeast Asia in roughly the first 11 months of 2022 were 52% lower at $6.3 billion compared with a record $13.3 billion raised from 152 IPOs in the whole of 2021, according to data from accounting and advisory services firm Deloitte.
Deloitte analysts pointed out that the pandemic had spurred a flood of new retail investors into the stock market, resulting in a boom in the IPO market globally in 2021, with the US and UK reporting record fundraisings through IPOs.
The trend for 2022 indicates that there were a higher number of smaller listings this year, with most of these companies having to take the public route to raise funds amid the challenging market environment, the analysts wrote in a note.
“Prior to the COVID-19 pandemic, the IPO activity moved in tandem with the economy and GDP growth. However, the inverse has happened in the last two years. Just as the world is winning the fight against the pandemic, the reopening of the world economies and borders have fuelled a rise in global inflation from 4.7% in 2021 to 8.8% in 2022, and consequently led to an increase in federal interest rate of almost 4% over the course of the year in a bid to tame the surging inflation,” said Tay Hwee Ling, Deloitte Southeast Asia’s advisory leader with the disruptive events team.
She noted that the Southeast Asia IPO market has “held up considerably well”, despite the macroeconomic headwinds.
However, the year also saw two blockbuster IPOs — PT GoTo Gojek Tokopedia in Indonesia and Thai Life Insurance in Thailand.
One of Indonesia’s largest tech companies, GoTo raised $1.1 billion from its public listing in April.
PT GoTo Gojek Tokopedia Tbk was formed by last year’s merger of ride hailing-to-payments company Gojek and e-commerce player Tokopedia. Both businesses serve millions of small and mid-sized firms across the archipelago.
Over in Thailand, Thai Life went public in July with 2.3 billion shares being sold at 16 baht a piece. The company raised over 34.4 billion baht, with around half of it coming from investors who had bought their stakes before the company went public, according to regulatory filings.
Other key IPOs in the region included Malaysian dairy producer Farm Fresh, which raised around RM 1 billion from its listing in March.
This has been a year of recovery for Bursa Malaysia as the “IPO market has recovered from the pandemic and performed better than pre-pandemic [times] due to investors’ demand for good fundamental companies”, Wong Kar Choon, country leader with Deloitte Malaysia’s disruptive events advisory team, said.
Elsewhere, Singapore had nine listings till Nov 11, with three key ones being the listing of Vertex Technology, Pegasus Asia, and Novo Tellus via SPACs (Special Purpose Acquisition Company).
Meanwhile, Vietnam has had six IPOs raising $65.05 million so far this year, with the top performers being industrial products operator Ton Dong A, which raised $26.89 billion; consumer business company Nova Consumer Group, which raised $21 billion; and financial services player Green Plus Joint Stock Corp, which raised $6.72 billion.
“Companies and investors are more cautious in the second half of  due to uncertainties in the global and local market,” observed Bui Van Trinh, a partner with the disruptive events advisory team at Deloitte Vietnam.
Going forward, the analysts stressed that they are “cautiously optimistic” of how listings would pan out for the rest of this year and into 2023.
This is even as more companies, especially those in the tech space, are seemingly choosing to stay private and raise funds from venture capitalists and private equity firms.
“Whether a company decides to go public or continue operating privately really depends on their ability to raise funds from investors. Some may continue to operate privately but others may feel it is easier get to more funds from a larger pool when they go public,” responded Tay.
Some of the bigger IPOs they are expecting next year are of e-wallet service provider LinkAja and logitech unicorn J&T Express, likely on the Indonesian Stock Exchange.