ACE Market Bound Nestcon Shares Oversubscribed By 57 Times

Investors appetite is evident in the recent showing of interest in listings, building and infrastructure construction services provider, Nestcon Berhad strong interest for its initial public offering is one such example the share were oversubscribed by 57.13 times ahead of its listing on the ACE market.

The group plans a public issue of 160,955,400 new ordinary shares at an issue price of RM0.28 per share, representing 25% of enlarged share capital, raising approximately RM45.07 million in IPO proceeds, along with an offer for sale of 32,192,000 existing shares.

Nestcon has received a total of 22,673 applications for 1,871,318,100 Shares with a value of RM524.0 million from the Malaysian public for the 32,192,000 Shares, representing an oversubscription rate of 57.13 times.

  • For the Bumiputera portion, a total of 11,281 applications for 712,728,700 Shares were received, translating to an oversubscription rate of 43.28 times. For the remaining public portion, a total of 11,392 applications for 1,158,589,400 Shares received, representing an oversubscription rate of 70.98 times.

The 32,192,000 Shares available for application by the eligible directors and employees have been completely subscribed. The private placement of 16,096,000 Shares available to selected investors along with 80,475,400 Shares available to Bumiputera investors approved by the Ministry of International Trade and Industry (“MITI”) have also been fully placed out.

Nestcon’s Managing Director, Datuk Ir. Dr. Lim Jee Gin is pleased with the strong response received and is optimistic that the long-term outlook for the construction industry is promising, underpinned by a variety of economic stimulus packages as well as the roll out of mass vaccination programme.

Currently the group has a strong unbilled orderbook of RM1.2 billion, which can sustain its revenue flow for the next three years. It has also received relevant approvals to remain operational for selected projects during the current Full Movement Control Order (“FMCO”) with strict standard operating procedure (“SOP”) in place.

He also added that project flow in the industry remains healthy, albeit at a slower pace, especially for infrastructure segments. The Group has tendered for approximately 51 projects worth RM2.8 billion, an all-time high tender book for Nestcon, out of which 66% of it is for the civil engineering and infrastructure segment and the remainder is for the building construction segment. 

On the IPO proceeds, Nestcon aims to use the capital for expansion plans which is in the pipeline, to enhance its technical capability to clinch larger projects and fortify its foothold in both building construction and civil engineering and infrastructure segments.

Nestcon is slated to be listed on the ACE market of Bursa Securities, 29 June 2021. Upon listing, Nestcon will have a market capitalisation RM180.27 million based on the issue price of RM0.28 and its enlarged share capital of 643,822,000 Shares.

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