KUALA LUMPUR (July 8): CTOS Digital Bhd (previously known as CTOS Holdings Sdn Bhd) said that its initial public offering (IPO) – Malaysia’s largest so far this year – was 27.57 times oversubscribed. The company, which plans to debut on Bursa Malaysia’s Main Market on July 19, received 51,494 applications for 1.26 billion shares out of 44 million available.
CTOS said in a report to the stock exchange that the Bumiputera component was oversubscribed by 14.37 times, with 14,192 applications for 338.07 million shares received.
Meanwhile, 37,302 applications totaling 918.86 million shares were received for the remaining public component, reflecting a 40.77 times oversubscription rate.
CTOS announced that the 30 million shares available for application via pink application form had been fully subscribed.
The joint global coordinators and joint bookrunners have verified that the 936 million IPO shares issued to Malaysian and overseas institutional and selected investors have been fully subscribed for the institutional offering.
“The institutional offering was subscribed for 54.4 percent by 23 cornerstone investors, while the remaining IPO shares available for bookbuilding had a tremendous demand of nearly RM6.5 billion.
Employees Provident Fund Board, Permodalan Nasional Bhd, Aberdeen Standard Investment, AIA, Eastspring Investments, FIL Investment Management, and JP Morgan Asset Management are among the participants, according to CTOS.
The high oversubscription in both the retail and institutional offers, according to the group’s CEO Dennis Martin, demonstrates the investing community’s confidence in the company’s track record and robust growth trajectory.
“In comparison to established countries such as the United States and the United Kingdom, Malaysia and ASEAN’s credit reporting industries are still in their infancy. As the market leader, we are ideally positioned to take advantage of growth opportunities in both existing and new categories and verticals.
“Our goal is to create a comprehensive credit reporting ecosystem in the region,” he said, adding that “the response from the investing public – both institutional and retail – demonstrates their trust in our capacity to achieve these goals.”
CTOS expects to generate RM220 million from its first public offering (IPO) at a price of RM1.10 per share.
A large portion of the IPO proceeds, totaling RM155.2 million, will be utilized to pay off debts, with the remaining RM59 million set aside for synergistic investment and target company acquisition.
The remainder of the RM6.1 million would be used to cover listing costs and expenses.
CTOS provides 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 customers who understand the value of knowing their financial standing to bet.
For the fiscal year ending December 31, 2020, the company made a net profit of RM37.98 million (FY20).
It also reported RM42.3 million in revenue in 1QFY21, up 24.1 percent from RM34.1 million the previous quarter, and a 73 percent increase in normalised profit after tax and minority interest to RM16.4 million from RM9.5 million.
Creador is CTOSl’s largest shareholder, owning 80 percent of the company and 1.6 billion shares prior to the IPO. Creador’s holding is likely to drop to 40%, or 880 million shares, after the IPO, according to the company’s prospectus.
Creador is engaging in his second massive IPO in less than a year. In October, the fund listed Mr DIY Group (M) Bhd, a home improvement store, for RM1.5 billion./n
