KUALA LUMPUR (Feb 17): RichTech Digital Bhd (KL:RTECH) could not sustain its share price gain on its first trading day on the ACE Market of Bursa Malaysia, following an intraday peak of 76.5 sen, with the stock closing at 32 sen, still up by 28% from its initial public offering (IPO) price of 25 sen.

The electronic reload and bill payment services firm opened at 75 sen apiece, triple that of the IPO price. At the closing price of 32 sen, RichTech was valued at RM64.8 million.

As much as 223.13 million shares changed hands, making RichTech the busiest counter on Monday. The group raised RM20 million from the IPO.

Demand for RichTech’s shares during the IPO was strong.

Applications from individual retail investors totalled over 245 times the number of shares available for subscription. Shares set aside for eligible persons were also fully subscribed while private placement of both new and existing shares to select investors was also fully taken up.

RichTech started in 2011 distributing electronic reloads for mobile airtime and data via an SMS reload system and a web portal at onlinereload.net, presently known as the SRS Portal. The company has since expanded its service to include payment of utility bills, quit rent and assessment, and game credits.

The company claimed 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 raised 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.

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.

Proceeds from the offer for sale, amounting to RM6.33 million, accrued entirely to the selling shareholders, including managing director Lee Teik Keong and substantial shareholder Yau Ming Teck. Post-IPO, the shareholdings of Lee will decrease to 50.27% while Yau’s stake will fall to 4.61%.

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).

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

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