KUALA LUMPUR (March 14): Chemlite Innovation Bhd’s initial public offering (IPO) was oversubscribed 28 times by retail investors ahead of its listing on the ACE Market.

Demand for shares of the surface finishing firm totalled 882.28 million shares for 30 million shares available, according to the issuing house. The Bumiputera portion was oversubscribed by 24.41 times while the remaining shares were oversubscribed 32.41 times by the public.

Shares allocated to eligible persons were also fully subscribed, while new shares for institutional or select investors through private placement were also fully taken up, the issuing house said. Offering of both new and existing shares to Bumiputeras through private placement was also fully bought up.

Notices of allotment will be posted to all successful applicants on March 25. Chemlite is slated for listing on March 26.

The IPO raised about RM45 million from the issuance of the 120 million new shares and an offer for sale of 60 million existing shares at 25 sen each. The listing offered up to a 30% stake in the company.

Penang-based Chemlite specialises in metal plating services on intermediate metal products with expertise in multi-layer metal coatings. The company also provides non-metal plating services on intermediate metal products, including anodising and other non-metal plating services.

The company mainly caters to the semiconductor, electrical and electronics as well as the machinery and equipment industry. At an IPO price of 25 sen per share, Chemlite would have a market capitalisation of RM150 million, valuing the company at 16.23 times its trailing earnings.

Proceeds totalled RM30 million from the public issue. The company has earmarked 26% of the proceeds for expansion of the group's facility, 23.3% for setting up cleanrooms, 3.33% for capital expenditure and 1.68% to establish a research and development department.

The company also set aside 18.33% for repayment of bank borrowings, 14% for working capital and the remaining for estimated listing expenses.

The public issue involved 30 million new shares for application by the Malaysian public, 21 million shares for eligible persons, private placements totalling 15 million shares for approved Bumiputera investors and 54 million to identified institutional and select investors by means of private placement.

An offer for sale of 60 million existing shares, meanwhile, raised RM15 million which will accrue entirely to founder and chief executive officer Chong Yuen Fong, and chief operating officer Heng Chee Kiang who co-founded the company.

Post-listing, Chong's stake will be trimmed to 38.5% while Heng’s direct holdings will be diluted to 31.5%.

UOB Kay Hian is the IPO’s principal adviser, sponsor, underwriter and placement agent.

Read also:
Chemlite Innovation opens application for ACE Market IPO at 25 sen per share
Chemlite targets 50% revenue from non-metal plating by 2026, driven by expansion