CTOS Digital Berhad has launched its digital prospectus and garnered strong support from local and global institutional investors for its impending initial public offering (IPO) on Bursa Malaysia Securities Berhad.
The Employees Provident Fund Board, Permodalan Nasional Berhad, Aberdeen Standard Investment, AIA, Eastspring Investments, FIL Investment Management, and JP Morgan Asset Management were among the 23 institutional investors who took part in the IPO’s institutional offering.
Group Chief Executive Officer Dennis Martin said during the launch, “CTOS Digital’s growth story, combined with an innovative, comprehensive product offering has proven to be a compelling one. The tremendous support from notable local and global institutional investors reflects their confidence in our strong track record and growth trajectory going forward.”
“CTOS Digital’s product offerings have expanded beyond credit reporting instruments to include a breadth of digital solutions to support every stage of the customer lifecycle. All of this comes on the back of steady financial growth, making us the leading credit reporting agency in Malaysia,” he added.
In particular, according to independent market research conducted by IDC Malaysia, Malaysia’s credit reporting market is expected to grow at a CAGR of 13.2 percent, far faster than the ASEAN, US, and UK sectors.
“To cater to the robust environment in Malaysia, we have steadily introduced new products each year, including CTOS eKYC, CTOS Consumer and SME Score, CTOS ID-Guard, the Malaysian banking industry’s first fraud bureau, and many more. This is in line with our plan to introduce more digital solutions to ultimately build a dynamic, stable and agile financial ecosystem in Malaysia,” Martin added.
CTOS Digital Group offers digital solutions to three main customer segments: the Key Account segment, which includes a large number of leading financial institutions and corporations; the Commercial segment, which includes a growing number of small and medium-sized businesses; and the Individual segment, which includes over 1.3 million individual customers who recognise the value of knowing their financial situation to access better credit.
Maybank Investment Bank (Maybank IB) and RHB Investment Bank (RHB IB) are joint main advisers, joint bookrunners, joint managing underwriters, and joint underwriters for the IPO alongside AmInvestment Bank.
Ami Moris, Chief Executive Officer of Maybank Kim Eng Group said, “In line with Maybank’s mission of Humanising Financial Services, we are pleased to play a part in bringing to the Malaysian capital market a digital solution that empowers the community to achieve financial well-being.”
Meanwhile, Jaimie Sia, Acting Chief Executive Officer of RHB Investment Bank said, “CTOS Digital Group is well positioned to benefit from robust key areas of growth within the credit reporting industry and maintains a clear leading market position within this space. RHB Investment Bank is honoured to be part of the Group’s promising journey ahead and wish the Management Team of CTOS Digital Group every success.”
As a further testament to the Group’s growth, CTOS Digital recorded RM42.3 million revenue in the first quarter ended 31 March 2021 (1Q21), 24.1% higher than the RM34.1million in the previous corresponding quarter (1Q20), while normalised PATAMI for the quarter grew 73% to RM16.4million in 1Q21 from RM9.5 million previously.
The Group’s performance grew at a 12.8 percent compound annual growth rate (CAGR) from RM110.5 million to RM140.5 million from the financial years ended 31 December 2018 to 2020 (FY2018 to FY2020). From FY2018 to FY2020, normalised net profit attributable to shareholders (PATAMI) grew at a faster rate of 22.2 percent, rising from RM30.5 million to RM45.5 million.
“We registered all-round growth across core customer segments, a clear indicator of our increasingly critical function as a digital solutions provider and partner to both businesses and individuals. We are buoyant about our future prospects as we retain our growth thrust. We also strongly believe in finding the right balance between reinvesting our profits for sustainable growth and generating shareholders’ returns. To this end, CTOS Digital is establishing a dividend policy of 60% of PATAMI to reward our shareholders’ confidence in us.” Dennis said.
The IPO exercise entails the public issue of 200 million new shares and an offer-for-sale allocation of 900 million existing shares, which are priced at RM1.10 per share.
Out of the RM220.0 million IPO proceeds, RM155.2 million will be used for the repayment of all bank borrowings to free up debt headroom, while RM59.0 million will be earmarked for synergistic investment and acquisition of target companies. The remaining RM6.1 million will be utilised to defray listing fees and expenses.
On the distribution of the 200 million new shares, 44 million will be made available for application by the Malaysian public via balloting; 120 million will be made available for application by the Group’s eligible directors, employees and persons who have contributed to the success of the Group, while the remaining 36 million will be offered to Malaysian and foreign institutional investors.
Meanwhile, the 900 million offer-for-sale allocations will also be made available to Malaysian and foreign institutional investors via a private placement exercise.
Applications for CTOS Digital’s IPO open June 30 2021 and close on July 6 2021. CTOS Digital is expected to list on the Main Market of Bursa Malaysia on July 19 2021.
