Singapore-based Jumbo Group Limited, a newly listed food & beverage firm on the Singapore Exchange’s (SGX) Catalist board, received strong interest from investors for its initial public offering (IPO) of 88,233,000 shares at an issue price of S$0.25.
This amounted to a value of S$22,058,250 ($15.51 million). Upon commencing trading today, their stock stood at S$0.35. At the time of publishing, their trading price was S$0.37.
Commenting on the support for Jumbo’s IPO, Ang Kiam Meng, Jumbo’s CEO and executive chairman, said, “We are heartened, yet humbled, by the strong response that our IPO has garnered.
Ang added, “With the successful conclusion of our IPO, which is also the largest Singapore IPO year-to-date for 2015, it bears testament to the investing public’s faith in Jumbo as a home-grown enterprise, our proven track record and the positive prospects. We are glad that with our listing, many of our stakeholders, including the public, are now able to participate alongside Jumbo’s growth.”
As at the close of the invitation at 1200 on 5 November 2015, nearly 7,205 valid applications for a total of 620,998,200 new shares were received for 2 million new shares available to the public. Trading of their shares will commence from today on the Singapore Exchange Catalist board.
According to a release, these applications represented total application monies of approximately S$155.2 million ($109.1 million). Of the 86,233,000 placement shares available for subscription, 86,173,000 shares were subscribed. This amounted to approximately S$21.5 million (US$15.1 million). This is concurrent with but separate to the invitation tranche of shares.
Mohamed Nasser Ismail, head of SME Development & Listings at SGX, responded positively to the listing, saying: “We are excited to welcome Jumbo, a well-known seafood restaurant chain in Singapore. Jumbo is a prominent player in the Singapore F&B scene. We look forward to supporting its growth story as it embarks on its next phase of expansion.”
The cornerstone investors, Orchid 1 Investments and Ron Sim, who subscribed for an aggregate of 72.1 million cornerstone shares, will maintain stakes of 6.2 per cent and 5 per cent in Jumbo respectively, pursuant to the cornerstone subscription agreement with Jumbo. Gross proceeds raised from cornerstone investors were approximately S$18.0 million (US$12.65 million).
Commenting on his investment in an interaction with Bloomberg, Sim stated: “In the next five years, it will be an interesting journey. We hope to be able to help them to be a little more strategic with the countries to expand.”
Altogether, this places Jumbo’s post-invitation market capitalisation at approximately S$160.3 million ($112.73 million), based on the issue price of S$0.25. Gross IPO proceeds amounting to approximately S$40.1 million (US$28.19 million) were raised from the invitation and cornerstone tranches.
Jumbo Group intends to deploy the capital from the net IPO proceeds of approximately S$37.5 million (US$26.3 million) to establish new outlets and refurbish existing outlets; acquire new premises, equipment and machinery; and for working capital and general corporate purposes.
Bloomberg notes that with the Jumbo Group IPO, the number of companies listed on SGX’s secondary Catalist amounts to 169 firms, with a total value of S$9 billion ($6.32 billion). For 2015, Jumbo Group’s offering is the largest year to date for Singapore.
For the 2015 period, 11 corporations raised S$194 million in initial share sales in Singapore, based on Bloomberg data., This compares with S$2.6 billion raised in the same period last year. Since January 2014, there has been a surge in IPOs globally. However, SGX has not benefited from this and continues to suffer various troubles while its regional rivals continue to enjoy sustained growth.
This may impact its social capital and raise doubts on its strength as an institution, which may further inhibit its ability to attract IPOs. However, it recently had success in persuading Israeli incubator Trendlines to establish a secondary listing in Singapore.
Commenting on Jumbo Group’s listing, Ang stated: “As a listed company, we are now in a better position to fortify and further grow our business. This heralds a new and exciting chapter of our corporate journey, and we look forward to building a sustainable, long-term enterprise for the benefit of our stakeholders.”