KUALA LUMPUR (Feb 6): TechStore Bhd's initial public offering (IPO) was overwhelmingly subscribed, with demand from retail investors nearly 100 times the number of shares set aside for them.

Demand for shares of the information technology services firm totalled 2.44 billion shares for 25 million shares available, according to a statement from the issuing house. The Bumiputera portion was oversubscribed by 87 times while the remaining public portion was oversubscribed by 106 times.

Shares allocated to eligible persons were also fully subscribed, while shares for select investors through private placement were also fully taken up, the issuing house said.

Notices of allotment will be posted to all successful applicants on Feb 14. TechStore is slated for listing on the ACE Market on Feb 18. 

TechStore sought to raise RM30 million from the issuance of the 125 million new shares and 25 million existing shares at 20 sen each. The listing offered up to a 30% stake in the company.

At an IPO price of 20 sen per share, TechStore would have a market capitalisation of RM100 million, valuing the company at 12 times its trailing earnings.

TechStore mainly provides IT security and automation solutions, including command and control systems, surveillance systems such as closed-circuit televisions and fire alarms, as well as electronic payment and operating systems.

The company has an order book totalling RM135.8 million, catering to Malaysia and Singapore clients in transportation, hospitality, education, logistics and banking industries. For the financial year ended December 2023, TechStore recorded net profit of RM7.7 million on revenue of RM62.2 million.

The IPO’s public issue is expected to raise gross proceeds of RM25 million, out of which RM11.5 million has been allocated for working capital. Meanwhile, RM5 million will go towards partially repaying bank borrowings totalling RM33.4 million.

The remainder is earmarked for recruiting business development personnel, capital expenditure, and defraying listing expenses.

Under the IPO’s public issue, TechStore offered 25 million new shares to the Malaysian public, and another 25 million shares to eligible individuals. The company also allocated 62.5 million new shares to Bumiputera investors, and 12.5 million shares to selected investors.

Proceeds from the offer for sale via private placement amounting to RM5 million will accrue entirely to the sole selling shareholder and executive director Mohd Fadzil Mohd Daud.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO.

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