KUALA LUMPUR (Nov 27): Investors snapped up shares of fertiliser firm Cropmate Bhd at its initial public offering (IPO) with the public tranche oversubscribed nearly 85 times.
Demand totalled 3.17 billion shares valued at RM633.81 million for 36.9 million new shares available for subscription, the company said in an exchange filing. The Bumiputera portion was oversubscribed 73 times while the public portion was oversubscribed close to 97 times.
Shares set aside for eligible persons were also fully subscribed while the shares for institutional and select investors through private placement were also taken up.
The notices of allotment will be posted to all successful applicants on Dec 4, 2024. Listing on the ACE Market has been scheduled for Dec 5.
Cropmate mainly involves in the formulation and blending of conventional and specialty fertilisers, as well as trading of straight fertilisers based in Selangor. The company currently has four blending-compacting production lines with an annual capacity of up to 214,000 tonnes of fertilisers.
At the offer price of 20 sen per share, Cropmate would have a market capitalisation of RM147.6 million, valuing the company at about 14 times 2023’s earnings. The company made a profit after tax of RM10.05 million for the financial year ended Dec 31, 2023.
The sale of new shares will raise RM42 million, of which RM17.1 million will be allocated for working capital to support its operations in providing fertilisers for durian orchards and oil palm plantations, the prospectus showed.
Cropmate also set aside RM16.7 million to partly finance the purchase considerations of factories where the company’s operations are located. The remaining funds are for capital expenditure, including the setting up of a research laboratory, and to defray listing expenses.
The offer-for-sale, meanwhile, will gross RM10 million and accrue entirely to the selling shareholders — managing director Lee Chin Yok and his sons Lee Cheng Seng and Lee Cheng Fei, who are both executive directors; as well as to substantial shareholders Lau Sam Siong and Datuk Tan Chew Chin.
Hong Leong Investment Bank is the principal adviser, sponsor, underwriter and bookrunner for the IPO.