KUALA LUMPUR (Oct 29): Shares of fortified food and supplement maker OB Holdings Bhd (KL:OBHB) rose 4.17% on their ACE Market trading debut on Tuesday.
OB Holdings opened at 25 sen, versus its initial public offering (IPO) price of 24 sen apiece, on a volume of 6.38 million shares. At the opening price, the company was valued at RM97.9 million on Bursa Malaysia.
Tuesday’s jump followed strong demand from investors for the company’s shares during its IPO that raised close to RM29 million.
The IPO’s public tranche was oversubscribed by 109.47 times. New shares it set aside for eligible persons, as well as selected investors, were fully subscribed. The shares it allocated to Bumiputera investors approved by the Ministry of Investment, Trade and Industry were also fully placed out.
Under the public issue of 120 million new shares, 19.6 million were made available to the Malaysian public, followed by 7.8 million to eligible directors. The remainder were reserved for select investors and approved Bumiputera investors. There was no sale of existing shares.
Established in 1995, OB Holdings manufactures the so-called fortified food and dietary supplements under various house brands, as well as for third-party brand owners. Its in-house product line includes softgel capsules, hard capsules, effervescent tablets, and teabags.
The company also offers contract packing services for various products, such as milk powder, tea leaves, honey, herb powder, fruit powder, and liquid chlorophyll into retail packaging sizes, along with the trading of milk powder and other activities.
More than half of the IPO proceeds of RM28.8 million will be allocated to repay bank borrowings incurred from the construction of a new factory in Serendah. The company will utilise RM3 million for working capital, RM1 million for marketing, and RM4 million to cover IPO-related expenses.
OB Holdings managing director Teoh Eng Sia and his wife Wong Chung Theng each own 19.68% stakes respectively after the listing. They also control a 30% stake via private vehicle Goodone Holdings Sdn Bhd.
Alliance Islamic Bank is the principal adviser, sponsor, sole underwriter and placement agent for the listing exercise.
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