KUALA LUMPUR (July 11): Golf equipment retail chain operator MST Golf Group Bhd’s initial public offering (IPO) to raise RM184.68 million from the sale of new and existing shares at 81 sen apiece has attracted an “overwhelming demand” of RM924 million orders from institutional investors.

In a statement, Malaysian Issuing House Sdn Bhd, on behalf of MST Golf, said total demand for the group’s 228 million IPO shares — comprising 160 million public issue shares and 68 million shares offered for sale by existing shareholders — represents a subscription rate of 5.28 times, it said.

Its institutional offering of up to 178.6 million shares — comprising 110.6 million issue shares and 68 million offer shares — was subscribed by 6.39 times, said the issuing house.

At the same time, a total of 2,603 applications for 62.73 million issue shares with a value of RM50.81 million were received for the 41.5 million issue shares made available to the Malaysian public — representing a subscription rate of 1.5 times.

“For the Bumiputera portion, a total of 1,316 applications for 15.47 million issue shares were received, representing a subscription rate of 0.75 times, while 1,287 applications for 47.25 million issue shares were received under the other Malaysian public portion, representing a subscription rate of 2.28 times,” the group said.

The 7.9 million issue shares made available for application by eligible persons have also been fully subscribed, the group said.

With an enlarged share capital of 820.87 million shares at an IPO price of 81 sen, MST Golf will have a market capitalisation of RM664.9 million upon listing, which values the company at about 27 times its price-earnings ratio — based on its net profit of RM26.65 million for the Dec 31, 2022 period.

The group has said that close to 90% of its IPO proceeds — based on the RM129.6 million it will raise from the issuance of new shares — will go towards funding its expansion in Malaysia and Singapore and into new geographical markets, followed by 2.3% for upgrading of digital technology facilities, 2.5% for working capital, and 5.4% for listing expenses.

MST Golf is slated to be listed on the Main Market of Bursa Malaysia on July 20. RHB Investment Bank Bhd is the principal adviser, sole underwriter and sole placement agent for the IPO exercise.

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