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|Tech startups are still miles from their IPO plans|
This was shared by Nguyen Anh Nhuong Tong, chairman of Yeah1 at a recent tech event. Accordingly, the pandemic has increased hazards for SMEs, delaying their IPO plans.
Echoing this, Lam Minh Chanh, founder of BizUni Business Administration JSC, said, “There will be no startups listed on the local stock exchanges in the next five years at the least.”
He explained that startups in Vietnam are still far from staging initial public offerings (IPOs) because most of them are running tremendous losses.
According to the Securities Law, companies need to report profit for two consecutive years before they can be listed. Moreover, the Ho Chi Minh City and Hanoi stock exchanges also require a minimum capital of VND120 billion ($5.2 million) and VND30 billion ($1.3 million).
As of now, only three tech companies – Yeah1, FPT, and ADG – have been listed on the local stock exchange among the 1,702 businesses in the database of the National Business Registration Portal.
Accordingly, Yeah1 is one of the many listed local companies with a market capitalisation in excess of $100 million. Meanwhile, VNG – with $2.2 billion in market capitalisation – has been preparing to list on the over the counter (OTC) market.
The listing process is usually time-consuming. For instance, Yeah1 took 12 years to ready itself, while FPT and ADG took 18 and 11 years. VNG, after announcing plans of listing on the NASDAQ in 2017, has yet to publish more information ever since.
“This is a long-term groundwork that will facilitate the transformation from a startup into a public company,” said Tong from Yeah1. “Five years before the IPO, Yeah1 had hired an audit consultant to handle the related procedures.”