This article first appeared in The Edge Malaysia Weekly, on December 21 - 27, 2015.    

MALAKOFF BHD’S much anticipated listing took place in the middle of the year.  

Asean’s largest independent power producer chose to relist its shares on Bursa Malaysia on May 15, 2015. This was the largest initial public offering (IPO) on the local stock exchange, raising some RM3.15 billion or US$862 million at the offer price of RM1.80.

It was also the second largest IPO in the region after Thailand’s Jasmine Broadband Internet Growth Infrastructure Fund that raised US$1.12 billion.

That makes Malakoff worth a notable mention for IPOs in The Edge’s Best Deals of the Year 2015.

Malakoff is 37.5% owned by Tan Sri Syed Mokhtar Albukhary’s MMC Corp Bhd. The utility giant owns various assets in Malaysia, Australia, the Middle East and North Africa. It has a total effective power generation capacity of 6,036mw.

Maybank Investment Bank Bhd (Maybank IB) notes that 12 high-quality domestic cornerstone investors subscribed for 73.2% of the total institutional offering.

“These cornerstone investors anchored the transaction and provided significant momentum required for the IPO,” says Maybank IB, adding that 9 of the 12 cornerstone investors have not participated as a cornerstone in Malaysian IPOs since 2013.

CIMB Investment Bank Bhd (CIMB IB), meanwhile, says it generated over 80% of the anchor demand, thereby successfully building a solid platform with several quality orders before the launch of the bookbuilding tranche that was oversubscribed 13 times.

“Overall, long-only investors, hedge funds and high-net-worth clients received 73%, 4%, and 3% of the book respectively, with the remaining 20% going to retail and other investors. The allocation strategy led to a stable aftermarket performance,” says CIMB IB.

Maybank IB and CIMB IB were the joint principal advisers, joint bookrunners and joint underwriters for the IPO.

According to Bloomberg, Malakoff’s consensus target price stands at RM1.96, which represents a potential upside of close to 20%. Currently, 16 research houses have “buy” recommendations, two have “hold” ratings and only one has a “sell” call.

It is worth noting that Malakoff’s 90%-owned Tanjung Bin Power Sdn Bhd is currently suing its Japanese boiler manufacturer for RM780 million for breaches of the duty of care owed to its 2,100mw coal-fired plant.

“While we are hopeful of a positive outcome, there is no impact on Malakoff’s current operations, hence, we make no adjustments to our numbers,” AmResearch analyst Max Koh says in his latest report dated Dec 2.

In the nine months ended Sept 30, 2015, Malakoff reported a net profit of RM346 million on revenue of RM3.92 billion.

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