SINGAPORE - Timber bedroom furniture maker LY Corp made its trading debut on the Singapore Exchange's Catalist board on Wednesday (Jan 31) at 28.5 Singapore cents, a 9.6 per cent gain from its 26 cents initial public offering (IPO) price.
As at 9.07am on Wednesday, the counter was trading at 29 Singapore cents apiece. Some 4.89 million shares changed hands.
LY Corp is the first to launch an IPO on the local bourse this year, and seeks to raise S$19.7 million in gross proceeds.
The Malaysian firm, which announced last month that it was planning an IPO, offered about 75.8 million placement shares at 26 cents apiece, consisting of 61.2 million new shares and 14.7 million vendor shares.
No public shares are available for subscription. When asked about this, the company told The Business Times that it considered costs in pursuing an all-placement offering. The company has adopted a share placement strategy which allows distribution to retail investors and interested public directly, rather than via the ATM network," an LY spokesman said.
The company said on Monday that the placement was "fully subscribed" and it received valid acceptances for all placement shares.
The firm counts Heah Theare Haw - a substantial shareholder in mainboard-listed Geo Energy Resources - and Pheim Asset Management among the IPO investors.
In its final offer document released earlier this month, the company said that the placement price of 26 cents per share is "substantially higher" than its net asset value per share of 13 cents based on the post-placement issued and paid-up share capital, adjusted for the net proceeds arising from the issue of the new shares.
The net proceeds raised from the placement will be S$16.7 million.
Net proceeds attributable to the group from the issue of new shares, after deducting estimated expenses of S$2.9 million, is about S$13 million.
The pricing reflects a price-to-earnings ratio of 8.1 times, based on the earnings per share of 9.7 sen from the audited combined statement of the group's comprehensive income for the year ended Dec 31, 2016, and the pre-placement share capital of about 426.7 million shares.
Said LY Corp's executive director and chief executive officer, Tan Yong Chuan: "We are encouraged by the strong investors' interest in the IPO, which reflects confidence in LY Corporation's track record and growth prospects. We believe that a listing on the Catalist board of the Singapore Exchange will provide us with the access to the international capital market that will offer us significant impetus to pursue our next phase of growth."
According to the bourse, LY Corp has a market cap of about S$127 million.