Where Does the Massive Capital from High-Profile IPOs Ultimately Flow?

Boosting Proprietary Trading and Margin Lending

Amid a favorable stock market environment, robust capital inflows, post-upgrade prospects, and a new regulatory framework, numerous companies are seizing the opportunity to go public.

The State Securities Commission (SSC) has introduced a coordinated review process for IPO and listing applications, streamlining procedures, enhancing transparency, and bolstering investor confidence. Additionally, Decree 245/2025/NĐ-CP integrates IPO and listing processes while reducing the lock-up period for share transfers, making new offerings more attractive.

Mr. Bùi Hoàng Hải, Vice Chairman of the SSC, stated that the Ministry of Finance and the SSC have planned to diversify financial products. The regulator has observed significant interest from organizations in going public, with more companies expected to follow suit. Decree 245, which integrates IPO and listing procedures, has further incentivized businesses to consider IPOs.

One of the largest IPOs in Vietnam’s securities history, VPBank Securities JSC (VPBankS), announced a public offering of 375 million shares at 33,900 VND per share. The total expected capital raised is nearly 12,713 billion VND.

During the IPO roadshow in Hanoi, Mr. Vũ Hữu Điền, Board Member and CEO of VPBankS, revealed that approximately 30% of the raised funds will be allocated to proprietary trading, including bonds, stocks, deposit certificates, and government bonds. Another 68% will be used for margin lending, with the remaining 2% for other purposes such as advance payments.

In 2022, VPBank acquired a small securities firm and increased its capital to 8,920 billion VND. By 2023, the capital was further raised to 15,000 billion VND.

Prior to VPBankS, Techcombank Securities JSC (TCBS) concluded its offering on September 18, successfully distributing 231.15 million shares and netting 10,729 billion VND after expenses. Of this, 70% will be allocated to proprietary trading, while 30% will support brokerage, margin lending, and advance payments for securities sales. TCBS’s TCX shares are expected to begin trading on October 21.

VPS Securities JSC recently finalized its IPO price at 60,000 VND per share, aiming to raise 12,138.6 billion VND. The majority of this capital, approximately 8,982 billion VND, will be directed toward margin lending. Any excess funds will also be allocated to margin activities.

Dual Boost from Market Upgrade and IPO Wave

A key concern following these large IPOs is whether the securities sector’s capital will be diluted. Mr. Hoàng Nam, Director of Research and Analysis at Vietcap Securities, believes that Vietnam’s market upgrade has opened doors to substantial foreign investment, with active capital potentially reaching 5-6 billion USD, surpassing passive inflows. This capital could participate in IPOs or capital increases by listed companies.

The upgrade momentum is not limited to FTSE Russell’s secondary emerging market status but could extend to MSCI or FTSE Russell’s advanced emerging market classification. Each upgrade will attract new capital, and Mr. Nam asserts that long-term capital inflows are not a concern.

Domestically, loose monetary policy has kept interest rates low, while approximately 34% of high-income earners still hold savings, creating significant potential for a shift to equities. Currently, only about 10% of Vietnamese have securities accounts, indicating vast untapped capital potential. In the short term, existing capital may rotate toward opportunities with favorable valuations, high growth potential, and strong ROE.

Dragon Capital Fund Management predicts that with a solid foundation and new momentum from the market upgrade, Vietnam is poised for a new growth phase. This potential is reinforced by major IPOs, with an expected scale of over 40 billion USD from 2026 to 2028.

Mr. Phạm Lưu Hưng, Chief Economist and Director of SSI Research, believes the market upgrade will drive a new wave of listings from large enterprises, particularly between 2026 and 2030.

State-owned enterprises undergoing equitization will also become an attractive supply source if transparent and efficient divestment mechanisms are in place. This will not only expand market size but also enhance sector representation, especially in strategic areas like technology, telecommunications, healthcare, and consumer goods.

To ensure the IPO wave becomes a true growth driver, Mr. Hưng recommends synchronizing various factors, including a fair pricing system, clear equitization mechanisms, and relaxed listing conditions, particularly for high-growth technology companies.