Singapore F&B player Jumbo Group makes strong listing debut; IPO oversubscribed 8x

Image of chilli crab from Jumbo Seafood Facebook page.

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.

UOB Bank is the sponsor and issue manager, with UOB and UOB Kay Hian acting as the joint underwriters and placement agents for this IPO.

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.”

Also Read: Square’s IPO valuation cut signals tough 2016 ahead for ‘unicorns’ 

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.”

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.