KUALA LUMPUR (April 17): ACE Market-bound WTEC Group Bhd's 24 million new shares offered to the Malaysian public by application under its initial public offering (IPO) saw a modest oversubscription rate of 1.61 times, with subdued Bumiputera interest. Its placement of shares to selected Bumiputera investors also drew a tepid response.
This muted interest comes after a slew of IPOs underperformed recently, as investors lean towards a risk-off mode as global markets are roiled by US trade policy changes. This also prompted some companies to postpone their listing plans.
WTEC, which manufactures foam products used in industries like automotive and electronics, as well as non-woven fabric parts for car armrests and seats, received a total of 2,055 applications for 62.69 million new WTEC shares valued at RM15.67 million from the Malaysian public, according to a statement released by Tricor Investing & Issuing House Services Sdn Bhd.
The Bumiputera public portion received only 888 applications for 9.16 million shares, with the balance having to be clawed back and re-allocated to non-Bumiputera investors based on the provisions of WTEC's prospectus. The other Malaysian public portion received 1,167 applications for 53.53 million shares, representing an oversubscription rate of 3.46 times.
WTEC's IPO, priced at 25 sen per share, comprised a public issue of 90.17 million new shares and an offer for sale of 43.2 million existing shares — including 3.43 million to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti).
Under the public issue, besides the 24 million shares allocated for the general public, there were 9.6 million shares set aside for application by eligible persons who contributed to the group (pink form applications) and the placement of 56.57 million shares to Miti-approved Bumiputera investors.
While the pink form applications have been fully subscribed, the placement of shares to Bumiputera investors — both the 56.57 million new shares and the 3.43 million existing shares — were only fully taken up after applying the relevant clawback and reallocation provisions. The balance 39.77 million existing offer for sale shares were fully placed out.
Successful applicants will receive their allotment notices on April 24, the statement read. Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for WTEC's IPO.
Scheduled to be listed on the ACE Market on April 29, WTEC will have a market capitalisation of RM120 million based on its enlarged issued share capital of 480 million shares.