KUALA LUMPUR (Feb 4): ACE-Market-bound RichTech Digital Bhd (KL:RTECH) saw its initial public offering (IPO) of 10.12 million shares at 25 sen apiece oversubscribed by 245.42 times.

The electronic reload and bill payment services provider said its 10.12 million shares for the Malaysian public received a total of 24,237 applications for 2.49 billion shares worth RM623.63 million.

According to its statement, of the 10.12 million shares, the bumiputera portion of 5.06 million shares received 12,601 applications for 1.06 billion shares — an oversubscription rate of 208.57 times.

The remaining 5.06 million shares under the public portion received 11,636 applications for 1.43 billion shares, presenting a 282.28 times oversubscription rate.

Meanwhile, the 1.55 million shares made available for application by eligible persons have also been fully subscribed.

RichTech said the oversubscription level reflects investor confidence in the company’s prospects and the growing electronic reload and bill payment industry.

“We are deeply grateful for the remarkable response to our IPO. The strong demand demonstrates confidence in RichTech’s mission to drive digital transformation in Malaysia’s digital economy landscape,” RichTech managing director Lee Teik Keong said.

“The funds raised will enable us to scale up our proprietary SRS platform, grow our market presence, and introduce innovative solutions to meet evolving consumer needs,” he added.

Notices of allotment will be posted to all successful applicants on Feb 13. RichTech is slated to be listed on the ACE Market on Feb 17.

At the 25 sen per share IPO price, RichTech is to be valued at RM50.61 million of market capitalisation at listing. This values the company at six times the earnings of its financial year ended Dec 31, 2023.

For the financial year ended Dec 31, 2024 (FY2024), RichTech reported a profit after tax of RM5.37 million, a 27% increase from FY2023, while revenue increased at the same pace to RM7.80 million.

Founded in 2011, RichTech began as a provider of electronic reloads for mobile airtime and data via an SMS-based reload system and a web portal, onlinereload.net — now known as the SRS Portal. Its services have since expanded to include utility bill payments, quit rent and assessment payments, and game credit top-ups.

RichTech mainly earns revenue by acting as an intermediary for its electronic reload services, with revenue being incentive- or commission-based.

For incentive-based revenue, a full payment amount is deducted from the company’s credit pool, and incentives are provided at the end of the billing cycle. For commission-based revenue, part of the payment is deducted upfront with the remainder deducted from the company’s credit pool.

The business-to-business segment — including reload retailers, mobile phone shops and third-party mobile applications that utilise its SRS services — makes up nearly all of its revenue.

From the IPO, Richtech is raising RM20 million in proceeds, of which 30% or RM4.5 million is earmarked for marketing, promotional and collaboration activities aimed at growing the user base on its digital apps, SRS App and SRS Portal.

RichTech also 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 sq ft.

KAF Investment Bank Bhd is the IPO’s principal adviser, sponsor, underwriter and placement agent.