ACE Market-bound TSA Group’s IPO oversubscribed by 8.62 times

TESTAMENT of robust public faith in the group’s growth potential, TSA Group Bhd, a distributor and supplier of ferrous and non-ferrous metal and other industrial hardware products, saw its initial public offering (IPO) being oversubscribed by 8.62 times ahead of its listing on the ACE Market of Bursa Malaysia on Feb 2 (Friday).

Throughout the public subscription period from Dec 27, 2023, to Jan 17, manufacturer and processor of stainless-steel pipes and other metal products received 4,304 applications for 148.78 million shares valued at RM81.83 mil. Of that quantity of shares, 15.465 million shares are made available to the Malaysian public.

The Bumiputera public portion was oversubscribed by 7.75 times after receiving 2,329 applications for approximately 67.69 million shares. For the other Malaysian public portion, a total 1,975 applications for 81.09 million shares were received, representing an oversubscription rate of 9.49 times.

Meanwhile, all the 15.46 million ordinary shares for eligible employees who have contributed to the success of TSA, 7.73 million ordinary shares for private placement to selected investors and 38.663 million ordinary shares for Bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI) have also been fully subscribed.

All in all, the IPO comprises a public issuance of 77.32 million new ordinary shares which represent 25.0% of TSA’s post-IPO enlarged share base priced at 55 sen/share.

“The notice of allotment will be posted to all successful applicants on or before Jan 30. The strong demand from investors reinforced the company’s commitment to deliver value to its shareholders,” TSA’s group managing director Chew Kuan Fah pointed out.

The company aims to raise RM42.53 mil from its IPO, of which about 47.0% will be strategically used to repay existing borrowings within five months of the listing.

“This move is a step towards solidifying our financial base, reducing debt and minimising interest costs, thereby enhancing our financial resilience,” explained Chew. “Another 29.0% of the proceeds raised are allocated towards strengthening our working capital over the next 36 months and improving operational efficiency.”

Based on the issue price of 55 sen/share, TSA will have a market capitalisation of RM170.12 mil upon its listing. AmInvestment Bank Bhd is the IPO’s principal adviser, sponsor, placement agent and underwriter. – Jan 19, 2024

Subscribe and get top news delivered to your Inbox everyday for FREE