KUALA LUMPUR (Jan 21): RichTech Digital Bhd, which distributes electronic reloads and provides bill payment services, has launched the prospectus for its ACE Market initial public offering (IPO) to raise up to RM20 million.
The IPO, priced at 25 sen per share, comprises 54.66 million new shares and an offer for sale of 25.31 million existing shares, according to the prospectus released on Tuesday. Collectively, the listing will offer investors a 39.5% stake in the company.
Application for the IPO will close on Jan 31, with the company scheduled for listing on Feb 17.
“Our IPO represents more than just a capital raising exercise — it reflects our dedication to enhancing the convenience and accessibility of electronic reload and bill payment services for a wide range of users,” RichTech managing director Lee Teik Keong said during the prospectus launch.
RichTech started in 2011, distributing electronic reloads for mobile airtime and data via an SMS reload system and a web portal onlinereload.net, presently known as the SRS Portal. The company has since expanded the service to include payment of utility bills, quit rent and assessment, and game credits.
The company claims that it now has some 32,000 end-users and a network of more than 1,000 corporate accounts that provide access to over four million users.
The public issue is expected to raise gross proceeds of RM13.67 million, of which RM4.5 million has been earmarked for marketing, promotional and collaboration activities to grow the user base of its SRS App and SRS Portal.
“Through our enhanced SRS platform, we are enabling businesses and consumers to adopt seamless digital solutions for electronic reload and bill payments, aligned with both national and global digitalisation trends," Lee said.
RichTech plans to spend RM3 million to acquire a new office to consolidate its headquarters and branch office under one roof, with an estimated built-up area of up to 6,000 square feet.
The rest will fund working capital requirements, including stocking up on electronic reloads that account for over 70% of its annual purchases, as well as cover estimated listing expenses.
Under the public issue, RichTech will allocate 10.12 million new shares for the Malaysian public and reserve 1.55 million new shares for eligible individuals. Meanwhile, 42.99 million new shares will be offered to selected investors via private placement.
Proceeds from the offer for sale, amounting to RM6.33 million, would go entirely to the selling shareholders, including Lee and substantial shareholder Yau Ming Teck. Post-IPO, the shareholdings of Lee will decrease to 50.27% from 82.61% while Yau’s stake will fall to 4.61% from 9.70%.
Yau is also a director of flour maker Lotus KFM Bhd (KL:LOTUS) and glove company HLT Global Bhd (KL:HLT). He holds substantial stakes in Lotus KFM and MESB Bhd (KL:MESB).
At an IPO price of 25 sen per share, RichTech would have a market capitalisation of RM50.61 million. Upon listing, the company will be valued at six times the earnings in the financial year ended Dec 31, 2023 earnings.
RichTech reported a profit after tax of RM5.37 million on revenue of RM7.8 million for the year.
KAF Investment Bank is the IPO’s principal adviser, sponsor, underwriter and placement agent.