Vietnam startups share 'IPO dream'

ABO/VNA - Having an IPO (initial public offering) is an unfulfilled dream for startups because they are all incurring losses, experts said.

“It is even more difficult to become public, because shareholders won’t accept defects,” he said.

He believes that no startup will be able to have an IPO in the next three years.

Under current regulations, businesses have to satisfy many requirements on stockholder equity and profit in consecutive years. As for enterprises which plan to list shares on the bourse, the requirements are even stricter.

With the requirements, the State wants to protect investors with limited knowledge. This is the common characteristic of many Southeast Asian countries and explains the low percentage of enterprises with an IPO.

In Vietnam, capital mobilized by businesses through the stock market is very low. In 2019, 1,674 companies mobilized VND93 trillion worth of capital, but 80 percent of that went into 10 large companies.

Businesses would prefer to borrow capital from banks rather than list shares on the stock market.

Opportunities to attract public investors depend on many factors, including the business fields in which enterprises operate. Plastics and packaging manufacturers are more difficult to list shares.

Experts also said that it is difficult for small and medium enterprises to launch an IPO, and even more difficult for startups. However,  the challenge is not the requirements on capital and profitability, but in the readiness to be transparent.

Despite the great challenges, startups have been told to continue cherishing the IPO dream.

Chi Mai  (Source: VNA)