This article first appeared in The Edge Financial Daily, on June 30, 2016.

KUALA LUMPUR: Soon-to-be-listed HSS Engineers Bhd is allocating RM24 million out of its expected initial public offering (IPO) proceeds of RM31.91 million to fund its expansion plans, which include strengthening its overseas presence and venturing into new business segments.

HSS co-founder and executive director Datuk Kunasingam Sittampalam said the group has earmarked RM15 million out of the allocation to expand its presence in India.

“India is one of the faster-growing economies in the world today. The new government that has been there for the past two years is putting a lot of emphasis on infrastructure.

“We believe there are opportunities to expand there, given that they are growing at that rate and as well as the need for infrastructure services,” he said at a press conference following the engineering services provider’s prospectus launch yesterday.

Kunasingam said the group already has a presence in India, in terms of its business information modelling (BIM) business in Chennai, but added that the group would like to be involved in the infrastructure design, construction supervision and project management segments in the country.

The group also sees opportunities in the Middle East, aiming to capitalise on the roll-out of infrastructure projects ahead of the Expo 2020 in Dubai and the 2022 Fifa World Cup in Qatar.

“In the past, we have had some collaborations in the Middle East. We have done some projects there, especially in the Mena (Middle East and North Africa) area. Our Chennai office that provides BIM services has projects in the Middle East right now.

“One of the reasons why we are looking at the Middle East, especially Dubai, is that they are going to have the Expo 2020 and they will roll-out lots of infrastructure projects. As well as the World Cup in Qatar. These are the main drivers to accelerate infrastructure, we think there are opportunities there to participate [in],” said Kunasingam.

Besides expanding overseas, the group has also allocated RM9 million to be used for domestic expansion, as HSS intends to venture into the provision of support services to the water and power sectors.

Kunasingam explained that the group is already involved in the power sector in Malaysia, but it is limited to the infrastructure works surrounding the power plant.

“Currently, we are already involved in the Malaysian power sector, but it’s limited to balance of power. This means that we don’t do the power plant itself, but we do all the infrastructure works around the plant,” he said.

He added that it is a similar case with the water segment, as the group is involved in the design of water reticulation systems. The group would like to acquire the expertise to provide engineering support services for water treatment projects.

HSS will be listed on the ACE Market on Aug 10, offering some 63.82 million shares at 50 sen per share, out of which 25% will be available for the Malaysian public.

The group intends to raise total proceeds of RM31.91 million through the listing exercise, out of which 12.6% will be used to pare down its borrowings, 2.2% for general working capital and 10% to cover its listing expenses, besides the 75.2% allocated for expansion.