KUALA LUMPUR (Oct 1): GB Bond Holdings Bhd (KL:GBBOND) ended its first day on the ACE Market below listing price as the industrial adhesive maker was caught up in a broader market decline.
The stock opened at 25.5 sen, just half a sen above its initial public offering (IPO) price of 25 sen per share, and declining immediately. The stock closed at 20.5 sen, down 18% from the IPO price, as more than 71 million shares exchanged hands.
GB Bond had a market capitalisation of RM84.5 million based on the closing price. ACE Market stocks were mostly down and the country’s benchmark index FBM KLCI was also lower.
This comes less than a week after flexible staffing firm Evocom Bhd (KL:EVOCOM) ended its ACE Market debut on Monday below IPO price. The stock fell about 28% to close at 13 sen, as opposed to its IPO price of 18 sen.
Demand for GB Bond’s shares during IPO was relatively weak, with the public portion oversubscribed just eight times, and a part was undersubscribed and had to be clawed back and reallocated.
The IPO raised nearly RM27 million, of which RM16.1 million went to the Penang-based company that makes adhesives or glue used by manufacturers, as well as sealants and related materials used in packaging, fabric lamination, woodworking, renovation, building materials and construction.
GB Bond has earmarked RM5.5 million from the IPO proceeds for rental of a new factory near its headquarters in Bukit Panchor, Penang, as well as purchase of new machinery to increase manufacturing capacity.
The company has also set aside RM3.5 million to establish a sales office and warehouse in Vietnam. The rest will be used for marketing activities, as working capital and to defray listing expenses.
Managing director Datuk Gooi Ching Koay pocketed RM10.7 million, more than one-third of the IPO's total proceeds, from an accompanying offer for sale of his existing shares.
Malacca Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO.
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