The rapid growth of Mexican non-bank financial institutions known as Sofoms could prompt them to explore simplified IPOs to attract capital, said Luis Arrieta, former owner of ABC Leasing and an adviser to industry trade group AMSOFAC.

Sofoms have tapped local capital markets for funding through debt instruments since 2011, when ABC Leasing became the first company in the country to issue senior bond trust facilities (certificados bursátiles fiduciarios), raising MXN 600m (USD 34.5 million) on the Mexican Stock Exchange (BMV), Arrieta said. He added that roughly 30% of these institutions’ funding now comes from such instruments.

Senior bond trust facilities, which typically range between MXN 200m and MXN 300m, face certain constraints, Arrieta said. One key limitation is that some institutional investors—such as pension funds known as Afores—are subject to caps on the maximum volume they can acquire, usually limited to around 30% of the total issuance, he noted.

A simplified IPO could serve as an alternative way to raise capital at a time when other financing options—such as venture capital—may come with aggressive return requirements, Arrieta said. In contrast, a traditional IPO was virtually impractical in the past, as the regulatory framework required several years of preparation, he added.

The government issued regulations for a simplified IPO in January 2025, following Congress’s approval in December 2023 of amendments to the local securities law that created a streamlined procedure known as inscripción simplificada.

The regulations issued allow smaller companies—classified as emisoras simplificadas Nivel II—to issue securities, including debt or equity, for up to approximately MXN 11bn within a single fiscal year. However, amendments to the regulations of local stock exchanges BIVA and BMV, published over the summer, were required to make the simplified IPOs fully operational, said Keigo Chávez, a finance law associate at Mexico City–based law firm Basham, Ringe y Correa.

Issuers classified as emisoras simplificadas Nivel I are subject to more limited issuance capabilities and may only issue debt instruments for up to MXN 11bn during a fiscal year, Chávez added.

A simplified IPO requires the involvement of a brokerage house—known as an intermediario colocador—which is responsible for reviewing and validating the information provided by the issuer and registering the instrument with the local securities registry (RNV). Such a process can take no longer than three months, as reported by this news service in 2024.

One of the objectives of the simplified IPO is also to lower issuance costs, Pedro Said Nader, a corporate and financial law partner at Basham, Ringe y Correa, told this news service. He estimated that a traditional IPO typically entails expenses of between MXN 4m and MXN 5m, as well as six months to a year of regulatory procedures; under the new mechanism, these costs could likely be reduced by about half.

Arrieta, who has held discussions with members of AMSOFAC about potentially entering simplified IPO processes, said some members would welcome the mechanism given their capital needs. He added that many association members have already issued debt in local stock exchanges for amounts ranging between MXN 800m and MXN 1bn, while remaining fully compliant with regulatory requirements, including obtaining credit ratings and environmental, social, and governance (ESG) certifications.

However, companies seeking to participate in a simplified IPO would have to meet additional requirements, such as publishing their financial statements, Arrieta said. He added that lessors and Sofomes face growing capital needs, as the industry expects to expand alongside increased industrial activity stemming from the US–Mexico–Canada Agreement (USMCA) negotiations. This, he noted, is likely to drive higher demand for vehicle and industrial equipment leasing services.

A potential issuance under the simplified IPO mechanism would need to reach between MXN 300m and MXN 400m to attract sufficient investor interest, said Álvaro García, executive president of the local brokerage houses association AMIB. He added that the regulatory framework restricts participation to institutional investors and individuals with either gross annual income exceeding MXN 4.4m or investment assets above MXN 13.2m.

A spokesperson for local exchange BIVA told this news service in a written statement that the exchange has received information requests from companies interested in issuing shares through the simplified IPO procedure but declined to provide further details on the number or profile of the companies involved. Meanwhile, Jorge Alegría, chief executive of the Mexican Stock Exchange (BMV), told this news service on March 4 that he expects the first simplified IPOs to take place before the end of the year.