This article first appeared in The Edge Malaysia Weekly on August 25, 2025 - August 31, 2025

THE biggest name among Malaysia’s 2012 initial public offerings (IPOs) has come full circle. Come Aug 25, trading of shares in FGV Holdings Bhd ­(KL:FGV) will be suspended ahead of its delisting after an oft-turbulent 13 years on the Main Market of Bursa Malaysia.

Having listed on June 28, 2012, at RM4.55 per share in the year’s biggest flotation on the local exchange, and the second largest globally that year, FGV will finally exit in the Federal Land Development Authority’s (Felda) second attempt to take the company private at RM1.30 apiece.

For subscribers to the public share sale that had raised RM10.5 billion, the exit offer price comes at a massive 71% loss to the IPO price. Fortunate are those subscribers who made a quick exit when the shares rose by a fifth at their debut. But it has been downhill for the stock since.

In 2012, the world economy was in a mess, still grappling with the aftermath of the 2007/08 global financial crisis. Lacklustre listings, with the exception of Facebook’s IPO on May 18 that year that raised US$16 billion, were the norm.

Domestically, three local deals — FGV, Astro Malaysia Holdings Bhd (KL:ASTRO) and IHH Healthcare Bhd (KL:IHH) — made it a milestone year for the country as the three flotations collectively raised RM20.8 billion and were ranked among the top 10 IPOs globally in 2012.

Investors who put their money in these counters, assuming RM45,500 for 10,000 IPO shares of FGV would be left with RM25,831 today, including total dividend payouts during the 13-year period. Their annualised total return for holding the FGV shares is -6.177%.

Those who put RM30,000 in Astro Malaysia for the same number of shares would be looking at a paper loss of RM27,529.50.

Only investors of IHH would have reason to celebrate. Those who set aside RM28,5000 for the same number of shares would have raked in gains of RM48,723.40 (see table).

All three IPOs were heavily backed by cornerstone investors. State-owned FGV Holdings’ list included Permodalan Nasional Bhd (PNB), Lembaga Tabung Haji (LTH), the Employees Provident Fund (EPF), Retirement Fund Inc (KWAP), Value Partners and Qatar Investment (Qatar Holding).

The late tycoon Ananda Krishnan’s Astro locked in an even broader slate of 22 cornerstone investors, including PNB, Tan Sri Chua Ma Yu, Great Eastern Life Assurance, Kencana Capital Libra Investment Sdn Bhd, Myriad Opportunities Masterfund, Nomura Asset Management and TPG-Axon International.

Khazanah-backed IHH, which also secured 22 cornerstone investors, had names such as International Financial Corp, Kuwait Investment Authority, BlackRock Inc as well as the EPF, PNB and LTH on its list.

Prior to its listing, FGV was a wholly-owned subsidiary of Felda whose main operating plantation company, Felda Holdings Bhd, was jointly owned by Felda (49%) and Koperasi Permodalan Felda (51%). As part of an internal restructuring, FGV acquired Felda’s 49% stake in Felda Holdings for RM1.57 billion cash in 2009.

In 2013, after its listing, FGV acquired the remaining 51% in Felda Holdings for RM2.2 billion cash.

In FGV’s IPO in June 2012, Felda raised RM5.5 billion as part of its offer for sale of existing shares and RM4.46 billion from the sale of new shares.

But structural issues started brewing at FGV from the get-go with naysayers warning that more than half of the estates FGV operated under Felda’s land lease agreement (LLA) were past their prime (older than 21 years), dragging down yields and cash flow. Another point of contention was the LLA itself, for which FGV was paying Felda RM248 million a year plus 15% of operating profit from the leased lands. However, Felda contended that it should be receiving more than what FGV paid. In 2020, prior to the first privatisation attempt, Felda had obtained cabinet approval for a recommendation to terminate the LLA with FGV.

The agribusiness firm’s capital allocation also drew fire as it forked out more than RM1 billion (including RM388 million in liabilities) to acquire Asian Plantations Ltd in October 2014, which was said to have come at a high price tag for a high acreage of non-plantable land. Incredibly, FGV is understood to have paid about RM65,000 per hectare for Asian Plantations when other companies had offered only RM20,000.

Other crises included governance friction exploding into the open in May 2017 as FGV suspended CEO Datuk Zakaria Arshad and in the following month, CFO Ahmad Tifli Mohd Talha and two other senior management officials, amid a probe into alleged irregularities involving delayed payments of US$11.7 million as of 2016 from Dubai-based Safitex Trading LLC to FGV’s unit, Delima Oil Products Sdn Bhd. The Malaysian Anti-Corruption Commission raided FGV’s headquarters soon after and the Prime Minister’s Office parachuted in Datuk Seri Idris Jala as an independent party to mediate. The prime minister then was Datuk Seri Najib Razak, who had been a big proponent of FGV’s listing.

Meanwhile, Astro’s relisting at RM3 on Oct 18, 2012, came with questions about its rich valuation and a maturing pay-TV model. This played out with the IPO opening at just 1% higher at RM3.03 upon its debut. However, in spite of the soft opening, the IPO raised RM4.6 billion, making it the country’s third-largest IPO that year after IHH Healthcare and FGV.

Floated as Astro All Asia Networks in October 2003, the pay-TV operator was taken private in June 2010 via Astro Holdings Sdn Bhd, a vehicle backed by Ananda via Usaha Tegas Sdn Bhd and Khazanah Nasional Bhd, at RM4.30 per share or RM8.5 billion cash.

People who believed in the relisting of the stock felt justified as Astro had a near-monopoly in the country’s residential pay-TV market with a growing subscriber base of 3.1 million out of 6.6 million households at the time.

The entertainment provider was also expected to see an increase in average revenue per user (ARPU) as subscribers migrated to high-definition TV platforms with high capital expenditure posing as entry barriers and limiting competition.

Over the years, nothing has come of periodic market chatter about a potential privatisation in a challenging landscape of competition from streaming services such as Netflix and local player iFlix offering international content.

In the last five years, Astro’s net profit has slipped from RM528 million in the financial year ended Jan 31, 2021 to RM128 million in FY2025 while revenue has fallen from RM4.36 billion to RM3 billion.

Once known for its handsome quarterly dividends of at least 75% of its consolidated profits, Astro in September 2023 revised its dividend policy for the financial year ended Dec 31, 2024, to 35% of profit after tax and minority interests as it struggled to cope with the shifting media landscape. Between its listing in 2012 and 2023, the company distributed a total of RM5 billion in dividends.

In the meantime, IHH has become a regional healthcare heavyweight. Its shares were trading at the RM6.80 level last week, which was at a more than 230% premium to the IPO price of RM2.85 per share when the company debuted on Bursa on July 25, 2012. With its concurrent listing at S$1.18 apiece on the Secondary Board of the Singapore Exchange, the stock raised RM6.3 billion, making it the largest healthcare IPO in Asia and the world’s third largest IPO behind only Facebook and FGV.

IHH made it to the FBM KLCI within a week and was also fast tracked to Singapore’s benchmark Straits Times Index from September that year.

Poised to benefit from increased medical tourism to the region, ageing populations and rising wealth in Southeast Asia, IHH is one of the world’s largest healthcare networks, with more than 80 hospitals in 10 countries, including its key markets Malaysia, Singapore, Türkiye and India. Locally, IHH also acquired Prince Court Medical Centre Kuala Lumpur from Khazanah (for RM1.02 billion) to complement its cluster strategy of having specialised tertiary hospitals in Kuala Lumpur; as well as Timberland Medical Centre Kuching, Sarawak, for about RM245 million to strengthen its expansion into Sabah and Sarawak; and Island Hospital (Penang), a medical tourism hub, for RM3.9 billion.

In tandem with the increasing demand for healthcare services, IHH has been building bed capacity and is focused on adding close to 4,000 new beds by 2028. According to its 2024 annual report, the group wholly owns Parkway Pantai, which has a network of 57 hospitals throughout the region. It also has a 90% stake in Turkish healthcare giant Achibadem Holdings, which has 24 hospitals in Türkiye, North Macedonia, Bulgaria, the Netherlands and Serbia.

Looking back, FGV’s 13 years on Bursa were indeed dramatic as structural and governance issues swamped the promise of a blockbuster listing, while Astro’s journey shows how business models can be outpaced by technology. IHH stands out with its steady growth strategy: adding beds where necessary and sweating its assets to compound its financial performance. 

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