Real estate group PropNex Realty enjoyed a buoyant share market debut yesterday with its stock closing 10 per cent higher.
The counter opened at 68.5 cents apiece, a 5.38 per cent premium over the initial public offering (IPO) level of 65 cents.
It reached an intraday high of 72 cents before closing at 71.5 cents, up 10 per cent with around 8.46 million shares changing hands. Its closing price gives it a market capitalisation of about $240 million.
Executive chairman and chief executive Ismail Gafoor noted: "Our IPO... provides a platform for PropNex to not only further solidify our position in Singapore, but also access the capital market to expand our business into new consultancy services as well as promising markets such as Vietnam and other South-east Asian countries.
"PropNex has grown rapidly from strength to strength from a small agency back in 2000, to become Singapore's largest home-grown real estate agency by number of agents."
The Singapore Exchange's head of equity capital market (sectors), Mr Simon Lim, said investors here are "well attuned" to investing in real estate, and the new listing will provide them with yet another opportunity to tap "the property cycle in Singapore, and in overseas markets where PropNex has presence".
PropNex's IPO closed at noon on June 28 with its public offer tranche 24.6 times subscribed.
The IPO overall was about 2.2 times subscribed based on the 42.5 million shares on offer - 40.375 million on placement and 2.125 million for the public.
Concurrently, 50 million shares were also sold at the offer price to cornerstone investors, including Nikko Asset Management Asia and NTUC Income Insurance Co-operative.
PropNex said in its prospectus that $12 million of the estimated $38 million of net proceeds was earmarked for local and regional expansion through mergers and acquisitions, joint ventures and partnerships strategy.
Around $8 million is slated for its real estate brokerage business, $7 million for expansion in a range of business services and $6 million for enhancing technology. The remaining $5 million will go towards working capital.
PropNex, the second real estate brokerage to list here after APAC Realty, is the largest real estate agency in Singapore by sales force, with 7,248 agents as of June 6.
Separately, PropNex has clarified its remarks on "inaccuracies" in response to newspaper reports on its IPO prospectus.
"This was in relation to certain feedback attributed to observers and members of the public that were cited in the said articles. This was not in relation to The Business Times article in itself," it said. "We apologise for this misunderstanding and regret any inconvenience caused."
PropNex was referring to The Business Times report, "$5m value in PropNex prospectus for agents' transfer causing a stir", and The Straits Times report, "PropNex's IPO document yields a couple of surprises", on June 21.
They had reported that a $5 million value pegged to PropNex's business takeover agreement with Dennis Wee Realty last year in the IPO prospectus lodged by PropNex had raised the eyebrows of many observers, who recalled that the transaction was previously said to have no dollar value.
It said the business takeover agreement between PropNex and Dennis Wee signed on Nov 29 last year had superseded earlier arrangements, including the memorandum of understanding (MOU) signed on June 10 last year when the merger was broached. The MOU did not include terms relating to any sum or consideration.