SGX’s IPO Revival: Big Listings Return Amid Longstanding Small-Cap Trend
In recent weeks, two notable IPOs have emerged on the Singapore Exchange (SGX): SGX:NTT’s data centre Reit, backed by US$1.6 billion in assets and aiming to raise about S$988 million, and SGX:Info-Tech Systems, debuting at S$0.87 per share with a market capitalisation of S$224.5 million.
Their entry marks a refreshing shift for a market that has long struggled to attract sizable IPOs. In recent years, SGX’s IPO landscape has been dominated by smaller, often unprofitable firms listing on the Catalist, many with market values under S$100 million.
The return of these bigger listings harks back to July 2005, when SGX launched its “upsizing” initiative—an effort to lure larger companies to list on its platform. Borrowing terminology from McDonald’s, SGX’s then-head of listings said the goal was to “upsize” the market, as larger firms tend to attract institutional investors with stronger long-term investment capabilities.
Although no specific size threshold was mandated, the target floated was a market capitalisation of at least S$300 million. This came at a time when many IPOs were of smaller, lesser-known firms that faced weak demand and raised negligible amounts post-fees.
Ironically, the upsizing strategy was already bearing fruit even before it was officially announced. Between January and July 2005, 37 new listings raised S$2 billion, adding S$7.2 billion in market value.
Two decades on, however, that momentum has largely dissipated. In fact, some observers might say the IPO scene has regressed—with many listings now being small-cap Catalist entrants placed entirely with selected investors, bypassing public tranches.
A key reason is that regional exchanges have grown more competitive. Exchanges in Malaysia, Thailand, Indonesia, and the Philippines now offer comparable platforms, reducing the incentive for companies to list in Singapore.
Still, with the listing of SGX:NTT’s Reit and SGX:Info-Tech Systems, SGX may have a chance to reignite the upsizing narrative. The timing could be right, especially with the Straits Times Index at record highs and valuations significantly up over the past year.
Size does not guarantee quality, but large companies do bring advantages. They often feature more experienced boards, benefit from the scrutiny of institutional investors, and enjoy broader analyst coverage. They’re also more likely to join major indices, which in turn attracts passive fund inflows.
Small firms still have a rightful place in the market, but the return of larger, higher-profile IPOs could help SGX regain its stature and attract deeper pools of capital.
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