FLEXIDYNAMIC Holdings Bhd which debuted on the ACE Market today may as well mark a turnaround in the appetite for initial public offering (IPO).
Recall that earlier this month, the glove industry service provider posted an oversubscription rate of 155.72 times for its IPO exercise – a tell-tale sign of a mini-bull run brewing in the local bourse. It has allotted 14.195 million shares for the Malaysian public.
Yet again today, it repeated an almost similar feat in its listing exercise. The company which is principally involved in the design, engineering, installation, and commissioning of glove chlorination systems opened at 69 sen which is 245% above its IPO price of 20 sen.
Soon after, it raced to an intra-day high of 72 sen before consolidation started to creep in, ending today’s first session at its intraday low of 46 sen – still up 130% – with 95.38 million shares exchanged hands.
“We have seen rubber-glove manufacturing activity growing significantly across the world during the COVID-19 pandemic,” commented the company’s managing director Tan Kong Leong on prospects for Flexidynamic.
“This increase in demand has led to the nearly full utilisation of production capacity among these manufacturers. We strongly believe that we can leverage off this increase in activity which will benefit the group in the long-run”.
Flexidynamic has indeed come a long way from when the company first started with a rented factory located in Banting to what it is today as a provider of both on-line and off-line glove chlorination systems with a wide customer base not only from Malaysia, but also Vietnam, Thailand, Indonesia, and Sri Lanka.
From the RM15.05 mil in proceeds raised from its IPO, RM6.38 mil will be used to repay bank borrowings to fund the acquisition of new factories.
A further RM420,000 will be used for the renovation of those factories while RM1.63 mil has been allocated for the purchase of machinery and equipment. Another RM3.62 mil will be allocated for working capital with another RM3 mil to be utilised as listing expenses.
Flexidynamic’s expansion includes building another two factories, which is expected to be completed by May with operations to start in 3Q 2021.
Both factories will have new machinery and equipment to carry out in-house manufacturing works and components for on-line glove chlorination systems. – March 30, 2021