KUALA LUMPUR (April 15): Autopart distributor MSB Global Group Bhd (KL:MSB) dropped 15% on its ACE Market debut, closing at 17 sen, down from its initial public offering (IPO) price of 20 sen per share. It is the sixth ACE Market listing since March to close below its IPO price.
MSB Global opened at 17 sen and moved between a low of 16.5 sen and a high of 18 sen during the day, before settling at 17 sen for a market capitalisation of RM104 million. Some 63.85 million shares changed hands.
This was despite the benchmark FBM KLCI closing marginally higher at 0.38%.
Investor demand during its IPO, which raised RM41.4 million, was also relatively weak with applications from retail investors totalling about six times the available shares for subscription.
MSB Global is a distributor of GSP-branded automotive parts and components in Malaysia, including driveshafts, wheel hub assemblies, suspension parts and steering racks.
The company is allocating 22.58% of the total proceeds from the public issue to buy new machinery and equipment, about 18.7% for the construction of a new factory and warehouse, and another 3.14% for its new in-house electric vehicle charger.
MSB Global will also set aside 20.67% for the repayment of bank borrowings, while the balance is for general working capital and to defray the listing expenses.
An offering of existing shares through private placement, meanwhile, raised RM14.8 million that went entirely to managing director Datuk Ow Kee Foo, executive director Lai Swee Ping, and Lee Li Lian, the wife of a director in one of MSB Global’s subsidiaries.
M&A Securities is the principal adviser, sponsor, sole underwriter and placement agent for the IPO.