Some Surprises in IPO Market

It is hard to believe anyone would be able to pull off a public share offering in 2009 and as one would expect, there were very few successful listings in Asia. Based on our records, Singapore-based bunkering company Yujin International was the only Asian shipping company that had found success in the IPO market. Interestingly, the company chose to list not in Asia but on the London AIM in a deal organized by nominated advisor and broker Seymour Pierce. The size may be small, but to have a Singapore company listing on a small alternative market in London is a big step. The company listed with 30,000 shares priced at GBP 0.33 each, making its total market capitalization after expenses just shy of GBP 10 million. Continue Reading

Pipavav Shipyard

This week, we are impressed to see another shipyard finding success in the IPO market. This makes India’s Pipavav Shipyard the third successful shipbuilder to raise equity following Taiwan’s China Shipbuilding Corporation and Malaysia’s TAS Offshore since the beginning of this year.

Pipavav Shipyard will soon be listed on the Bombay Stock Exchange and National Stock Exchange upon the completion of its book building. The private shipyard has offered its shares at a price band of Rs 55 – 60 a piece and plans to raise between Rs 4.7 billion (USD 98 million) and Rs 510 billion (USD 106 million). This amount is significantly lesser than the USD 200 million it had previously planned when the shipyard registered its IPO during the first quarter of 2008. Out of the 85.45 million shares on offer, 2.6 million shares have been set aside for the employees. We have provided a summary of the transaction in the Guts of the Deal table that follows. JM Financial Consultants, Citigroup Global Markets India, Enam Securities and SBI Capital Markets are the appointed bookrunners for this IPO. Continue Reading

TAS Offshore Finds IPO Success

Riding on improved sentiments in the global equity markets, we have witnessed a number of public equity placements, mainly in the form of new shares placements or rights issues. Companies are seizing the window of opportunity to re-capitalise and strengthen their balance sheets in order to better prepare themselves for the uncertainties ahead. Malaysian export-oriented shipbuilder TAS Offshore has successfully sold 77 million new shares, or 42.8% of the enlarged capital and paid up share capital, at RM 0.90 a piece and raised RM 69.3 million (USD 19.8 million) on the Bursa Malaysia Stock Exchange.

This makes TAS Offshore the third shipping company to have found success in the IPO markets since the beginning of this year after Singapore’s Yujin International and Taiwan’s China Shipbuilding Corporation. Gone are the good old days when investors had a large appetite for shipbuilders, but the successful listing of TAS Offshore despite its small size, demonstrates that there are still pockets of liquidity waiting to be tapped. The public retail tranche of 9 million for the Malaysian public was oversubscribed by 19.47 times. Kudos goes to OSK investment Bank for bringing the Sarawak based shipbuilder to the stock market in a maiden debut at 5% premium to its offer price. OSK Investment Bank has also played an important role in underwriting 52 million new shares under the public issue to facilitate the success of this offering. Continue Reading