PETALING JAYA: Nestcon Bhd made a firm debut on the ACE Market of Bursa Malaysia Securities today, closing at 32 sen, a 4 sen premium over its offer price of 28 sen, with 257 million shares changing hands.
Nestcon opened at 30 sen, representing a premium of 2 sen or 7.1%. The opening volume was 28.4 million shares.
In a statement, the group said it has a solid order book of RM1.9 billion from clients with strong fundamentals, out of which RM1.2 billion remains unbilled.
Despite the Covid-19 pandemic, it has not encountered any contract termination.
In terms of order book replenishment, it has about 51 tenders valued at around RM2.8 billion.
Nestcon group managing director Datuk Lim Jee Gin said the group will expand its portfolio to include projects such as renewable energy works.
“We believe the industrialised building system (IBS) facility we are establishing will elevate our building segment capability meaningfully and put us on the front foot among our peers,” he said in a statement.
Lim pointed out the technique has been adopted by many big construction companies in Malaysia due to the benefits in quality control, cost reduction, and acceleration of timelines, among others.
“In addition, this will enable us to reduce reliance on foreign workers, which is especially timely as the industry faces potential foreign labour shortages. Meanwhile, the addition of new machineries and equipment will enhance the civil engineering and infrastructure segment as we look to tender for more larger-scale projects.”
Year to date, Nestcon is the second-largest initial public offering (IPO) in the ACE Market in terms of amount raised. The group amassed a total of RM45.1 million from the public issue of its listing exercise.
Of the RM45.1 million, RM6 million (13.3%) will be used to establish an IBS facility for the building division, RM6.6 million (14.7%) to purchase machinery and equipment, RM16.5 million (36.6%) to repay bank borrowings, RM11 million (24.3%) is for working capital needs; and RM1 million (2.2%) to upgrade software and systems. The remaining RM4 million (8.9%) is to defray listing expenses.
According to Nestcon’s prospectus, its IPO involved a public issue of 160.96 million new shares and an offer for sale of 32.19 million existing shares in the company.
In a Bursa filing today, Nestcon said that upon listing, the company will have 643.82 million issued shares.
Based on Nestcon’s closing price of 32 sen and 643.82 million issued shares, its market capitalisation is about RM206.02 million.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter, and placement agent for Nestcon’s IPO exercise, and Eco Asia Capital Advisory Sdn Bhd is the financial adviser.
