If you are a new investor seeking to apply for an Initial Public Offering (IPO) in Singapore, hopefully this guide will help you navigate your way.
If you are a seasoned investor, the next page will also help you to give insights to an optimum manner of plonking your money for the highest possible chances with limited cash at hand.
Enjoy! And HealthyTrading!
- Keep up to date with the latest lodged IPO offerings via
- MAS IPO prospectus website
- SGX IPO website
- Straits Times (there should be a full page advertisement in the Money section detailing the IPO)
- Read the available IPO prospectus for the following (but not restricted to) key information. The official prospectus is available via SGX IPO website. Alternatively, you may also find a copy available via your iBanking website at the section for IPO (before you actually select and confirm your subscription to the IPO, there will be a prospectus link available for your reference and confirmation that you have read and understood the investment).
- Key dates
- Invitation for subscription - this is the date by which all applications for new public shares close. In essence, this is the cut-off date for retail investors applying for the public tranche. Apply through ATM/iBanking (more info below) before this date.
- Ballot - this is the date that a ballot will be carried out in the event of an over-subscription for the public tranche of new shares to suitably allocate the shares. No action required.
- Ballot + 1day - After the balloting day, expect your full amount of cash back in 24 hours into the same account that you used to apply for the IPO. This will take effect if you are unsuccessful in your application. If you are, congratulations!, you may also receive cash back if in the balloting process, your applied number of shares got scaled down (eg. apply 10 lots, but allocated 2 lots), which is usually the case for a Singapore IPO. No action required for both results. An example information carried by the IHH Berhad IPO balloting results announcement document.
- Commence trading - This is the day that the shares will finally begin trading on the SGX mainboard/catalist and therefore market price publicly known and determined through demand and supply.
- Key ratios
- Risks that the company are exposed to
- Apply for the IPO when you are fully convinced with the investment prospects and their alignment with your risk appetite and targets. Apply before the subscription closing date. Below are some questions and answer to this process.
- You can do so via ATM/iBanking (electronic applications) via the 3 local banks in Singapore (DBS/UOB/OCBC). DBS/UOB/OCBC all charge a nominal fee of $2 for the balloting transaction.
- You do not have to use an account that is linked to your brokerage via EPS.
- ATM/iBanking process will prompt user to input CDP account number if you are a first time applicant for a Singapore-listed IPO. If you have done this before, the CDP account is reflected and re-confirmed as your personal script storage account. This will confirm that any successful allotment of shares will be placed in the rightful owner's account.
- As you can already see, IPOs are usually oversubscribed and there will be a very high chance for ballot. In that light, how can you maximise your cash stockpile for use in the balloting? Check out the current SG IPO Statistics and the optimal amount to put for balloting IPOs in another article that I have written.
- Check application status after 7pm (typically, but could be earlier) on the day of the ballot. IPOs are generally oversubscribed given their slightly discounted nature and spare liquidity lying around. Therefore balloting is typical and on top of a chance-based allotment, you may usually get a lower number of shares that you have originally applied for. Refer to your bank ATM/iBanking for your status of application and head to SGX to retrieve the official balloting results announcement that should look like this below An example information extracted from the official IHH Berhad balloting results announcement document.
- Happy trading!
An example of the details of the invitation detailing all key dates for the IPO obtained from the JB Foods IPO prospectus.