KUALA LUMPUR (Mar 4): Saliran Group Bhd’s initial public offering was oversubscribed by more than 76 times by retail investors ahead of its listing on the Ace Market.

Demand for a slice of the company, which supplies pipes to the oil and gas industry, totalled 1.47 billion shares for 19.15 million shares available, according to the issuing house. The Bumiputera portion was oversubscribed by 48 times while the remaining shares were oversubscribed 104.49 times by the public.

Shares allocated to eligible persons were also fully subscribed, while new shares for select investors through private placement were also fully taken up, the issuing house said. Investors also fully bought up an offer-for-sale of existing shares.

Notices of allotment will be posted to all successful applicants on Mar 11. Saliran Group is slated for listing on Mar 13.

The IPO raised about RM32 million from the issuance of the 80.4 million new shares and 38.29 million existing shares at 27 sen each. The listing offered up to a 31% stake in the company.

Saliran Group is a supplier and distributor of pipes, fittings and flanges, as well as related parts and accessories, and steel products. The company has more than 19,000 unique products used in the oil and gas industry to support processing, refining and manufacturing activities. 

At an IPO price, Saliran Group would have a market capitalisation of RM103.38 million, valuing the company at 10.42 times its trailing earnings.

More than one-third of the proceeds from the public issue has been earmarked for general working capital and the company has also allocated 32% for repayment of bank borrowings. The company will spend 5.5% to set up a sales office in Indonesia and 6.6% to buy machinery and delivery trucks.

The rest will be to defray listing expenses.

The public issue involved 19.15 million new shares for application by the Malaysian public, 7.66 million shares for eligible persons, and private placements totalling 54 million shares for approved Bumiputera and select investors.

Proceeds from the offer for sale to select investors accrues entirely to a private company controlled by Saliran Group managing director Dennis Liaw Choon Wei, executive director William Chan and chief operations officer Lim Bak Teik.

Malacca Securities Sdn Bhd is the IPO’s principal adviser, sponsor, underwriter and placement agent.