Tepid investor interest a dampener on Vietnam’s strong IPO pipeline

VIETNAM is entering what market players describe as one of its busiest equity issuance periods in years, but investor appetite for new shares is waning.

The Vietnam Private Capital Agency had projected a US$3 billion to US$5 billion initial public offering (IPO) pipeline for 2026-2027, describing the coming period as “the most active cycle in a decade” after five years of largely-muted activity.

However, recent transactions suggest a choppy recovery ahead. Several issuers have missed their fund-raising targets, or delayed their IPO timelines because demand has proved particularly selective, especially for non-traditional business models launching in a sluggish market.

F88 Investment JSC, which operates Vietnam’s largest pawnshop network with nearly 1,000 stores nationwide, is a clear example.

In July, the Mekong Capital-backed consumer-finance tech firm was hoping to raise as much as 1.56 trillion dong (US$59.8 million) through its first public sale of newly issued shares. This came ahead of its planned listing on the main bourse, Ho Chi Minh City Stock Exchange (HoSE), later this year.

But merely half of its share offering was subscribed, raising roughly 782 billion dong over three weeks. The remaining unsold shares were subsequently cancelled.

Chris Freund, founder of Vietnam-focused private equity firm Mekong Capital, a major F88 shareholder, blamed the outcome on timing.

“I think they just had really unlucky timing,” he told The Business Times, describing July as “basically the worst month”.

He added that raising half the intended amount in that environment was, nonetheless, still “an achievement”.

The weak take-up stood in stark contrast to F88’s fundamentals. Its first-half 2026 revenue had climbed 53 per cent to 2.94 trillion dong, and its profit attributable to shareholders had more than doubled to 545 billion dong.

Freund argued that investors need more time to understand the business. In a market dominated by traditional commercial banks, F88 was offering something relatively rare – a tech-driven, fast-growing alternative lender and the first of its kind to list on the Vietnam stock exchange.

The lukewarm response is a far cry from 2025, when a stock-market rally revived Vietnam’s IPO market. Most major deals then were oversubscribed, sending fundraising to a multi-year high of 38.6 trillion dong.

This year has been less forgiving.

Dien May Xanh, Mobile World’s consumer-electronics retail unit, fared considerably better than F88, but still did not sell its entire offering in its June IPO. In one of Vietnam’s largest recent equity offerings, the company raised over 13.3 trillion dong, about 7 per cent below its target.

Golden Gate, the restaurant-chain operator backed by Temasek-linked investors, lost its public-company status from Jul 31 after failing to complete securities-registration and trading procedures.

It said the move reflected plans to refine its IPO strategy and “select an appropriate timing to optimise the company’s valuation and deliver long-term value to shareholders”.

Amy Grupo, a Vietnamese building-materials manufacturer seeking to raise 787 billion dong through an IPO from July, has also extended its subscription period by almost four weeks. It did not disclose a reason.

Tougher market

Those deals are landing in a market where money has become noticeably scarcer.

Average daily trading value has fallen sharply in recent months due to combination of prolonged geopolitical tensions, inflation pressure, high domestic interest rates and heavy foreign outflows.

Foreign investors have so far net-sold roughly US$3.5 billion in Vietnamese shares this year, following record net-selling of about US$5 billion in 2025.

Domestic retail appetite has also weakened, with many investors reallocating money towards lower-risk alternatives such as bank deposits and gold amid ongoing uncertainty.

The VN-Index has fallen nearly 9 per cent in the last three months and is down over 3 per cent in the year to date, after having surged more than 40 per cent in 2025.

The subdued backdrop has put a cloud over one of the biggest market catalysts in years – Vietnam’s inclusion in FTSE Russell’s emerging-market indices this September.

The timing is also particularly awkward because the supply of new equity is still building.

Companies had proposed or approved about 289.5 trillion dong of additional equity issuances and IPOs for 2026, noted FiinGroup. The figure is 86.5 per cent above the amount raised in 2025, and 53.7 per cent above the five-year average.

However, about 70 per cent of the planned issuances had yet to happen in the first five months of this year.

IPO plans alone total about 22.4 trillion dong, 42 per cent below 2025’s figure. Consumer names long cited as potential candidates for listing – including Golden Gate, Highlands Coffee and Long Chau – have yet to come to market.

FiinGroup wrote in its analysis in June: “This suggests that the IPO market remains highly selective and has yet to truly enter a new boom cycle (comparable to 2017 and 2018).”

At the same time, investors are increasingly looking toward another potential source of supply: state-owned enterprises. Recent policy efforts to accelerate restructuring and state divestments could eventually bring more large companies and government stakes to market.

Some analysts, however, warn that if conducted simultaneously, stake sales by this group could overwhelm the domestic market’s normal absorption capacity.

Not yet easy to list

A bearish market is only one obstacle. Even when investors are willing to buy, many companies face structural difficulties qualifying to list in Vietnam.

Mekong Capital’s Freund called the positive-retained-earnings rule “the single biggest problem” for venture-backed companies, which can carry accumulated losses for years after having turned profitable.

Fixing the issue would enable funds to exit successful investments through public markets, which would, in turn, help attract more international capital to local firms, he said.

Vietnam still has advantages, Freund added. Relatively small companies can list, and liquidity can be good. “Listing is still a pretty good way to exit (in Vietnam),” he noted. “But it would help if the country makes it a little easier to get more companies listed.”

For those that cannot – or do not want to – list domestically, going overseas presents another set of hurdles.

Dr Charlie In, founder of Raffles Capital, said that before attempting to tap global capital markets such as the US, South-east Asian companies often establish offshore holding structures in Singapore because its legal, tax and auditing framework are more familiar to global investors.

Vingroup’s legal affairs head Ho Ngoc Lam said at an event in May that initial efforts to dual-list VinFast in Vietnam and Singapore were hampered by unclear local rules on share custody and international investor fund transfer. Securing outbound-investment approvals from Vietnam’s authorities were also a hurdle.

It prompted the group to restructure the electric-vehicle maker under a Singapore entity before its Nasdaq listing.

Lam said: “I hope the Vietnam International Financial Centre will create more open conditions to give Vietnamese companies greater financial strength to expand overseas more robustly.” THE BUSINESS TIMES