300 private firms fit for listing

KUALA LUMPUR: The Malaysian Investment Development Authority (Mida) has identified some 300 private companies from various sectors fit for a potential listing on the stock exchange’s main board.

The firms identified, via a survey on 4,000 companies with licences approved by Mida, have an uninterrupted net profit of more than RM20 million for a period of three to five full financial years, and a paid-up capital of RM2.5 million and above.

Mida deputy CEO Datuk N. Rajendran said in line with the country’s progress towards Industry 4.0, it is vital for companies to have the capacity to expand, and making a way to the boards of the stock exchange can be beneficial for them to tap into more capital.

“We believe the government cannot continuously support the expansion and reinvestment of existing companies by providing them incentives and grants, although it is still available,” said Rajendran.

“We’d also like them (companies) to go out to the market for expansion purposes and seek funds, but a lot of them have difficulties getting funding from banks,” he told reporters at a press conference after a forum entitled “Grow Your Business …List on Bursa” organised by Mida in collaboration with Bursa Malaysia.

According to Rajendran, the process of expanding in line with Industry 4.0 can be costly, hence it is essential for companies to have access to funding.

Speaking at the same event, Bursa Malaysia chief commercial officer Selvarany Rasiah said while a listing exercise would give companies access to capital, it also helps with boosting its profile.

“A lot of companies underestimate the value of listing on (their) profile,” she said.

Selvarany said while companies have several available funding options with the likes of banks, debt markets and capital markets, lately there has been a stronger demand for capital markets.

Meanwhile, Mida in April launched its SME Investment Desk in a move to aid small and medium enterprises (SMEs) gain funding by engaging with banks and private equity firms for funding arrangements.

Mida Domestic Investment Division director Ahmad Tajudin Omar said while the investment arm’s grant may be able to satisfy 30% of a projects funding, it is also working with banks such as SME Bank and MIDF as well as private equity firms to fill the remaining 70%. The desk also provides advisory services through its state officers.