KUALA LUMPUR (Sept 5): Steel Hawk Bhd (KL:HAWK) shares doubled in their ACE Market trading debut on Thursday, following strong demand during the oil and gas services firm’s initial public offering (IPO) that raised RM13.5 million.

Steel Hawk opened at 30 sen on trading volume of 6.49 million shares, compared with its IPO price of 15 sen per share. By 9.10am, the stock was trading at 35.5 sen, after more than 41.67 million shares changed hands, giving it a market capitalisation of RM178.85 million.

Steel Hawk is the first company that underwent a listing transfer from the Leading Entrepreneur Accelerator Platform — better known as the LEAP Market — to the ACE Market, under the new market transfer framework. 

Steel Hawk saw strong demand during its IPO, with the offering oversubscribed by 276.83 times — the highest subscription rate so far this year.

The Bumiputera portion saw an oversubscription rate of 245.25 times, while the public portion recorded a higher oversubscription rate of 308.40 times. New shares allocated to eligible persons and selected investors were fully subscribed, and the offer for sale of existing shares was also fully taken up.

The company is mainly involved in the provision of engineering, procurement, construction, and commissioning services for chemical injection skids, and improvement or maintenance of topside oil and gas facilities. It also sells, installs and maintains oilfield equipment. 

Steel Hawk’s prospects are bright, underpinned by Petroliam Nasional Bhd’s (Petronas) annual domestic capital expenditure spending as part of its long-term target of growing Malaysia’s oil and gas production, said deputy chairman and executive director Datuk Sharman K Michael.

“The recent discovery of potential hydrocarbon reserves in the Langkasuka Basin located on the west coast of Peninsular Malaysia presents further opportunities for future exploration and development,” Sharman said during the company’s listing ceremony.

The company has been dependent on Petronas group as its major customer, which contributed 85.84% to its revenue for the financial year ended Dec 31, 2021 (FY2021) at RM21.33 million, FY2022 at 54.47% (RM36.13 million), and FY2023 at 45.64% (RM33.10).

Steel Hawk has set aside 51% of the RM13.5 million proceeds from the public issue to go towards the construction of the proposed Teluk Kalung Facility 2 in Terengganu, where it recently secured a scaffolding services contract from Petronas Chemicals Group Bhd (KL:PCHEM).

The company also earmarked 15% of the proceeds as working capital and 7.4% for the repayment of bank borrowings.

Steel Hawk shareholders include Sharman and his wife Annie V Sinniah, as well as Radiant Capital Sdn Bhd, which is a private investment vehicle of Steel Hawk chief executive officer Salimi Khairuddin and chief operating officer Khairul Nazri Kamaruddin.

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O&G unit Steel Hawk’s ACE Market IPO oversubscribed by 276.83 times 
ACE Market-bound Steel Hawk secures scaffolding services contract from PetChem unit  
Steel Hawk unveils ACE Market IPO prospectus to raise RM20.21 mil
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Steel Hawk gets Bursa nod for proposed transfer to ACE Market