KUALA LUMPUR (Sept 28): Evocom Bhd (KL:EVOCOM) fell over 20% in its trading debut on Monday as weak market conditions weighed on the flexible staffing firm.
Shares of Evocom opened at 15 sen compared to the initial public offering (IPO) price of 18 sen per share. The stock fell to as low as 13.5 sen in about 30 minutes after trading began and was trading at 14 sen at 9.40am as more than 30 million shares changed hands.
Based on the last price, Evocom’s market capitalisation stood at RM64 million.
Demand for Evocom’s shares during the IPO was relatively weak, with the public portion oversubscribed by less than four times, while a certain portion of the IPO was undersubscribed and had to be reallocated to other categories of investors.
Headquartered in Semenyih, Evocom mainly supplies manpower to support the logistics operations of online commerce platforms. SPX Express, the in-house delivery arm owned by the e-commerce platform Shopee, accounts for more than 80% of its annual revenue.
The company also provides network support services, including last-mile delivery, transhipment and parcel shipment service. Evocom is also the manager for two of Lazada’s distribution hubs, and the company was granted a licence last year to provide international inbound courier service.
The IPO raised for the company RM20.5 million, of which more than one-third of the proceeds has been earmarked as working capital for its cash-intensive staffing service. Evocom is also spending another 30% to develop technology application and to expand its air freight transhipment business.
Evocom is also setting aside 7% to set up its new headquarters in Nilai, Negeri Sembilan, and another 7% as general working capital. The rest will be used to cover listing expenses.
Ian Tan Kee Chuan, founder and chief executive officer of Evocom, pocketed RM3.96 million from an offer for sale of his existing shares in the company.
NewParadigm Securities is the IPO's principal adviser, sponsor, sole underwriter and sole placement agent.