KUALA LUMPUR (Dec 20): The public portion of ACE Market-bound DPI Holdings Bhd’s initial public offering (IPO) has been oversubscribed by 23 times.

The Johor-based aerosol paints producer said it received 7,368 applications for 585.2 million shares, worth a total of RM146.3 million, for the public tranche of 24.3 million shares.

“The oversubscription from the Malaysian public and the overwhelming take-up from investors for the private placement portion is a huge vote of confidence in our business model, and the growth potential displayed by DPI,” DPI executive chairman and managing director Peter Chai @ Choy Mui Seng said in a statement today.

He said with local and international demand for aerosol paints on the rise, the company is looking towards doubling its production capacity, in order to meet the anticipated increase. 

DPI intends to construct a new factory with four new fully-automated aerosol filling lines, as well as upgrade the production lines in the existing plant into fully-automated aerosol filling lines. The new factory would be adjacent to the existing plant.

“The group had submitted its building plans to the relevant authorities and is now awaiting approval to begin construction of the new plant. Barring unforeseen circumstances, production in the new factory is set to commence in the first half of 2020,” it added. 

DPI is scheduled to be listed on Jan 7. Its IPO entails the issuance of 126.5 million new shares at 25 sen per share, to raise RM31.6 million in proceeds.

Of this, RM23.5 million would be used for capital expenditure towards expansion of production capacity, RM3 million for extension of consumer reach through marketing and advertising activities, and RM1.3 million for development of new product range.

Affin Hwang Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.