KUALA LUMPUR: Dairy producer Farm Fresh Bhd has set its initial public offering (IPO) price at RM1.35 per share.
The company said based on the RM1.35, it would have a market capitalisation of RM2.5 billion upon its listing debut from an enlarged share capital of 1.86 billion shares.
The IPO will raise about RM1.0 billion to Farm Fresh and its major shareholders.
The IPO, which will be Malaysia's largest IPO since June 2021, involves an offer for sale of up to 520.2 million existing shares and a public issue of 223.0 million new shares.
Proceeds to the company of RM301.0 million, raised via the public issue, will be utilised to establish a new manufacturing hub, dairy farm and integrated processing facility in Malaysia, expansion of a production facility in Australia, regional expansion outside Malaysia and for working capital together with listing expenses.
The IPO has secured support from a record number of 30 cornerstone investors, the most seen in a Malaysian IPO to date.
The 30 renowned cornerstone investors include Abrdn, Affin Hwang Asset Management, AIA, Alcea Rosea (Creador), Barings Singapore, Eastsprings Investments, Employees Provident Fund, Fortress Capital Asset Management, Franklin Templeton Asset Management (Malaysia), Great Eastern Life Assurance (Malaysia), Hong Leong Asset Management, Hong Leong Assurance, JPMorgan Asset Management (Singapore), KAF Investment Funds, Kenanga Investors, Kumpulan Wang Persaraan (Diperbadankan), Lembaga Tabung Haji and Manulife Investment Management.
Farm Fresh said the cornerstone investors would take up 80 per cent of the institutional offering tranche under the IPO.
From financial year ended March 31, 2019 (FY19) to FY21, the company's compounded annual growth rate (CAGR) for revenue was 65.9 per cent from RM178.2 million to RM490.5 million and its net profit attributable to its owners of increased at a CAGR of 14.9 per cent from RM27.4 million to RM36.2 million.
According to Frost & Sullivan, Farm Fresh wass the second-largest player in the ready to drink (RTD) milk category (which includes the chilled RTD milk and ambient RTD milk segments) for the first nine months of 2021, commanding an 18 per cent share of the market.
In the chilled RTD milk segment, Farm Fresh was the market leader, with its market share at 42 per cent for the nine months ended September 30, 2021.
The company is also the third largest player in the yoghurt category with an 11 per cent share of the Malaysian market.
Pursuant to the launch of the prospectus, applications for the public issue portion are open from today and will close at 5pm on March 8.
Farm Fresh is scheduled to be listed on Bursa Malaysia's Market on March 22.