THERE is this tell-tale sign of IPO (initial public offering) punters back in droves with the benchmark FBM KLCI index expected to pick up pace as forward looking investors increasingly capitalise on prospects of the COVID-19 recovery theme play.
On a broader picture, one wonders if Flexidynamic Holdings Bhd’s oversubscription rate of 155.72 times for its IPO exercise can be regarded as a harbinger of a mini-bull run brewing in the local bourse.
To re-cap, the IPO of the glove industry service provider entails a public issue of 75.23 million shares at an issue price of 20 sen/share, of which 14.19 million shares are available for application by the Malaysian public.
As pointed out by Datuk Bill Tan, managing director (corporate finance) off M&A Securities Sdn Bhd which is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise, the subscription amount is the highest ever for an IPO in the past three years.
“(This) marks the pent-up demand for quality IPOs backed by the return of positive investor sentiment for fundamentally solid businesses,” he remarked with a tinge of marketing pitch for client Flexidynamic.
In all fairness, the IPO punters could have been lured by the highly affordable issue price of 20 sen per share that the glove industry service provider is offering en route to its listing on the ACE Market of Bursa Malaysia on March 30 (according to Flexidynamic’s prospectus).
They are obviously not interested – or could not be bothered by the nature of industry that Flexidynamic is in – notably the design, engineering, installation and commissioning of glove chlorination systems as well as the design and installation of storage tanks and process tanks.
All-in-all, Flexidynamic received a total of 23,466 applications for 2.22 billion new shares valued at RM444.94 mil for the 14.19 million new for public subscription.
In addition, the 4.258 million new shares for application by the eligible employees and persons who have contributed to the success of Flexidynamic and its subsidiaries have also been fully subscribed. Another 56.78 million shares made available for application by way of private placement have also been fully placed out.
“We are overwhelmed and thrilled by the encouraging response we received for our IPO,” commented Flexidynamic managing director Tan Kong Leong.
“The oversubscription reflects the confidence that the investing public has in our group’s business prospect and future plans.”
According to Tan, the company has laid a strong foundation to build a resilient business for the past nine years.
“This has paved the way for our future growth as we continually aim to expand our business worldwide,” he enthused. “We trust that with this IPO will help to accelerate the growth of our company to become the key leader in the glove manufacturing industry.”
The notices of allotment will be posted to all successful applicants on or before March 26 – March 20, 2021