KUALA LUMPUR (Feb 22): ACE Market-bound Oppstar Bhd launched its prospectus on Wednesday (Feb 22), with an initial public offering (IPO) price of 63 sen, implying a market capitalisation of RM400.81 million upon its tentative listing on March 15.
According to the prospectus, the IPO price translates into a price-earnings multiple of 24.14 times based on the group's earnings of RM16.61 million or 2.61 sen per share for the financial year ended March 31, 2022, and a share base of 636.2 million.
The integrated circuit (IC) design service provider also announced a dividend policy of a 25% target payout ratio for its profit after tax.
It targets to raise RM104.25 million based on the 26% enlarged issued share capital upon listing of 636.20 million shares.
RM50 million would be allocated for business expansion through the expansion of the workforce, representing 47.96% of RM104.25 million.
Others include the establishment of new offices representing 23.98% or RM25 million of the target amount, RM12 million (11.51%) for its research and development expenditure, RM12.65 million (12.14%) for working capital, and estimated listing expenses at RM4.6 million or 4.41% of the target amount.
Oppstar said that the IPO includes a public issue of 165.48 million new shares, representing approximately 26% of its enlarged issued share capital of 636.2 million shares upon listing.
From the 165.48 million shares, 31.81 million shares will be made available to the Malaysian public, followed by 22.27 million shares for application by eligible directors, employees and business associates.
Meanwhile, 31.87 million shares were allocated for selected investors via private placement, followed by 79.53 million shares to identified Bumiputera investors approved by the Ministry of International Trade and Industry of Malaysia via private placement.
Oppstar executive director and chief executive officer Ng Meng Thai said that the IC design industry remains robust, with continuous demand for technological advancements and increasing uptake of IC design services by semiconductor companies.
"To many people, ICs are heavily regarded as the core foundation of today's technology, and with consumers being constantly on the lookout for the latest innovation, the growth of IC design has been further supported by the rapid and accelerated pace of digitalisation.
"Given the anticipation for more complex IC design jobs, we believe our IPO exercise will be instrumental in enabling us to expand our existing capabilities in IC design services."
Through its subsidiaries, Oppstar is principally engaged in the provision of IC design services covering front-end design, back-end design and complete turnkey solutions. Its customers include integrated device manufacturers, fabless companies, fab-lite companies, electronics system providers and other IC design houses. Oppstar’s IC designs can be used for end products in industries such as telecommunications, industrial electronics, automotive and consumer electronics.
The company expects to be listed on Bursa Malaysia on March 15, with the closing of retail offerings on March 3.
Affin Hwang Investment Bank Bhd is the principal adviser, sponsor, sole placement agent and sole underwriter for the IPO exercise.
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