KUALA LUMPUR: Nestcon Bhd's initial public offering (IPO) has been oversubscribed by 57.13 times ahead of its listing on the ACE market of Bursa Malaysia.
Gaining strong domestic interest, the building and infrastructure construction services provider has received a total of 22,673 applications for 1.87 billion shares with a value of RM524.0 million from the Malaysian public for the 32.19 million, representing an oversubscription rate of 57.13 times.
The company's listing entails a public issue of 160,95 million new ordinary shares at an issue price of 28 per share, representing 25 per cent of enlarged share capital.
A total of 11,281 applications for 712.73 million shares were received from the Bumiputera portion, translating to an oversubscription rate of 43.28 times.
Meanwhile, for the remaining public portion, a total of 11,392 applications for 1.16 billion shares were received, representing an oversubscription rate of 70.98 times.
The company also plans to raise about RM45.07 million in IPO proceeds, along with an offer for the sale of 32.19 million existing shares.
Managing director Datuk Ir Dr Lim Jee Gin said the strong response for its IPO exemplifies the confidence from the public towards Nestcon's plans and growth prospect.
"We are optimistic that the long-term outlook for the construction industry is promising, underpinned by a variety of economic stimulus packages as well as the rollout of the mass vaccination programme," he said in a statement today.
He is confident that Nestcon will continue to chart its growth trajectory supported by a strong unbilled order book of RM1.2 billion, which will sustain its revenue flow in the next three years.
"We have received relevant approvals to remain operational for selected projects during the current Full Movement Control Order (FMCO) with a strict standard operating procedure (SOP) in place.
"This is a positive development as compared to the complete operational halt during the previous lockdown.
"With this, we expect to turn in a satisfactory set of results for 2021. But what is more important is our future earnings growth prospect beyond 2021 that we hope would bring excitement to our shareholders," he said.
He said project flow in the industry remains healthy, albeit slower, especially for infrastructure segments.
The company has tendered for approximately 51 projects worth RM2.8 billion, an all-time high tender book for Nestcon, out of which 66 per cent of it is for the civil engineering and infrastructure segment, and the remainder is for the building construction segment.
"Leveraging on the proceeds raised from the IPO exercise, we will accelerate our expansion plans in the pipeline to enhance our technical capability to clinch larger projects and fortify our foothold in both building construction and civil engineering and infrastructure segments," he added.
Nestcon is slated to be listed on the ACE market of Bursa Malaysia on June 29, 2021.
Upon listing, Nestcon will have a market capitalisation of RM180.27 million based on the issue price of 28 sen and its enlarged share capital of 643.82 million shares.