Shares of Topmix Bhd rose by 32% in its trading debut today (Apr 23) after the surface decorative products company’s initial public offering (IPO) on ACE Market of Bursa Malaysia raised RM31 million.
At the opening bell, the share price of Topmix opened at 41 sen, representing a premium of 32.3% over the issue price of 31 sen, with an opening volume of 12,248,800 shares versus its IPO price of 31 sen per share before climbing to as high as 45.5 sen on Bursa Malaysia.
The stock was trading at 44 sen at 9.10am after 56.14 million shares changed hands. The country’s benchmark index was up 0.2%.
Topmix Managing Director Teo Quek Siang said, “Today marks a pivotal milestone for Topmix as we embark on a new chapter of growth as a publicly listed company. The success of our IPO underscores our commitment to propel Topmix forward, solidifying our Group’s position in the surface decorative products market.”
“The fresh capital raised through the IPO positions us strongly to execute our expansion plans. Our immediate focus includes broadening our product range by expanding into the assembly of melamine faced chipboard (“MFC”) products, catering to new customer segments like furniture manufacturers. MFC provides a cost-effective option for furniture carcasses, while complementing our existing HPL surface decorative products. This allows us to offer customers complete, colour-coordinated products at competitive prices.”
“Additionally, we will establish a sales office in Pulau Pinang to capture business opportunities in the northern region of Peninsular Malaysia. This strategic expansion will allow us to meet the rising demand from customers, increase brand and product awareness, and respond more promptly to product orders across the region. Recognising the growth potential in the central region as well, we are committed to serving our expanding demand for our product applications in both residential and commercial properties. Thus, we intend to expand our warehouse capacity in the central region, facilitating a wider range of inventory for faster order fulfilment.
“Our growth plans are well-aligned with the recovery and growth observed in the property markets, driven by various government initiatives and approved investments in spurring property developments. Additionally, growing affluence of the population and a preference for personalised spaces, urbanisation, and growth in Malaysia’s furniture industry further bolster the demand for surface decorative products. We will intensify our marketing and sales efforts and enhance our Topmix HPL mobile application, aimed at elevating brand and product awareness to further capitalise on these opportunities.”
To recap, the Group raised a total of RM25.6 million from the IPO. Of this amount, RM11.3 million (44.2%) is directed towards general working capital, while RM6.0 million (23.3%) will facilitate business expansion, marketing and sales initiatives, including the establishment of a new sales office and warehouse expansion. Furthermore, Topmix has allocated RM5.3 million (20.8%) for the expansion into MFC products assembly. The remaining RM3.0 million (11.7%) is set aside to cover listing expenses.
It was reported earlier saw its initial public offering oversubscribed by 58.61 times.
The Group’s listing involves a public issuance of 82,709,000 new ordinary shares, representing 21.0% of its enlarged share capital, as well as an offer for sale of 19,693,000 existing shares, or 5.0% of its enlarged share capital by way of private placement to selected investors. Topmix is set to raise IPO proceeds of RM25.6 million at an IPO price of RM0.31 per Share.
Topmix said it had received a total of 12,438 applications for 1,173,893,100 Shares with a value of approximately RM363.9 million for the 19,693,000 Shares allocated to the Malaysian public, representing an overall oversubscription rate of 58.61 times. For the Bumiputera portion, the Group received 7,108 applications for 520,482,700 Shares, reflecting an oversubscription rate of 51.86 times. As for the other Malaysian public category, 5,330 applications were submitted for 653,410,400 Shares, resulting in an oversubscription rate of 65.36 times.
The 7,877,000 Shares available for application by the eligible directors, employees and persons who have contributed to the success of Topmix have been fully subscribed.
Furthermore, the 55,139,000 Shares offered through private placement to selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry (“MITI”) and selected investors, as well as the 19,693,000 Offer Shares made available by way of private placement to selected investors have also been fully placed out.
Notices of allotment will be dispatched to all successful applicants on 18 April 2024.
The company will list on 23 April 2024. With an IPO price of RM0.31 per share and an enlarged issued share capital of 393.9 million shares, the Group’s market capitalisation upon listing is estimated to be approximately RM122.1 million.
M & A Securities is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
