KUALA LUMPUR (July 12): Johor-based pawnbroker Well Chip Group Bhd, which is en route to listing on the Main Market of Bursa Malaysia on July 23, said its initial public offering (IPO) has been oversubscribed by 12.87 times.
In a statement, the group said it received 13,057 applications for 416.12 million shares from the Malaysian public, which is over the 30 million new shares it made available for public subscription.
There were 3,572 applications for 96.56 million shares under the Bumiputera portion, which translates to an oversubscription rate of 5.44 times. The remaining public portion saw 9,485 applications for 319.56 million shares, indicating an oversubscription rate of 20.30 times.
Further, it said the joint placement agents have confirmed that 75 million IPO shares offered to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti), and 45 million IPO shares offered to institutional and selected investors have been fully placed out.
Under the public issue, 30 million new shares were made available for the Malaysian public of which half would be set aside for Bumiputera public investors.
Well Chip offered 150 million shares for its IPO exercise, which is equivalent to 25% of its enlarged issued share capital, via its IPO exercise at RM1.15 per share.
With its IPO price at RM1.15 per share, the counter has a price-earnings (P/E) multiple of 19.54 times, based on earnings per share of 5.89 sen or net profit of RM35.32 million for the financial year ended Dec 31, 2023 (FY2023).
Well Chip, which is involved in the provision of pawnbroking services and business of retail and trading of jewellery, aims to raise RM172.5 million via IPO.
Of the RM172.5 million proceeds, RM124.3 million will be utilised as cash capital for its existing 23 pawnshops. Another RM40 million will be used for the expansion of pawnshops, and the remainder will be used to defray listing expenses.
The company intends to recommend and distribute dividends of at least 35% of its consolidated profit after tax attributed to its shareholders for the first three financial years after its listing.
Kenanga Investment Bank Bhd is the principal adviser for the IPO. Together with CGS International Securities Malaysia Sdn Bhd, Kenanga is also joint underwriter and joint placement agent for the IPO.