First IPO of the year Binasat makes strong debut
PETALING JAYA: The first initial public offering (IPO) of the year got off to a strong start, with shares in Ace Market debutant Binasat Communications Bhd surging more than a quarter on its maiden trading day.
The stock closed 13 sen or 28.3% higher at 59 sen, with 72.6 million shares being traded.
“This first IPO of the year is off to a promising start, signalling a welcome positive note for the capital market this year.
“The oversubscription of over 34 times is a real testament to the confidence from the market. We anticipate more listing exercises in the pipeline this year,” said Kenanga Investment Bank Bhd managing director Datuk Chay Wai Leong in a statement.
Kenanga was the principal adviser for Binasat’s IPO.
The IPO came at a time when the optimism on global growth and the Malaysian corporate sector boosted the local stock market index FBM KLCI to levels unseen in almost two years.
Binasat, offered to sell 125.98 million shares at 46 sen apiece. The IPO was oversubscribed by 34.23 times.
Binasat’s main business is in the provision of telecommunications supporting services for satellites, mobile and fibre optic telecommunications networks, which comprise installation and commissioning of satellite ground stations at sites, satellite hubs at teleports, installation and commissioning of mobile network equipment, and laying of fibre optic cables and installing network equipment.
Bernama reported yesterday that the company was exploring new growth areas within the industry.
“There are segments in the market which we have yet to explore. So, we should be able to expand further in terms of group revenue and in line with the capital expenditure of most telecommunications companies (telcos), with the modernisation of spectrum by the Government and a few other initiatives towards expanding mobile coverage nationwide,” chief operating officer Zulamran Hamat was quoted as saying at a press confer- ence yesterday.
He also said that the company was diversifying its customer base.
“Given that we have a recurring income of about 50%, we are optimistic of sustaining growth and revenue,” he said.
On expansion plans to Vietnam, Laos and Myanmar, he said Binasat was in talks with potential local partners in the respective countries, and hoped to set up a representative office for a start within this year.
“Due to strict government regulations in these countries, we need to find the right partner to work with and comply with all the rules,” Zulamran said.
The IPO comprised 85.979 million public issue and 40 million offer for sale shares, for 46 sen apiece. The 40 million offer for sale shares and 59.979 private placement shares were placed out to selected investors.
Binasat said it had raised a total of RM39.55mil from its IPO, of which it has earmarked 36.3% or RM14.24mil to set up teleports and RM10.5mil for working capital.
The remaining RM14.8mil proceeds will be utilised to enhance its fibre optic network installation and commissioning services capability, regional business expansion, particularly into Vietnam, Myanmar and Laos, as well as listing expenses.