Geohan Corp Bhd's Initial Public Offering (IPO) Debut: A Mixed Start on the Main Market
KUALA LUMPUR (Dec 5): Geohan Corp Bhd made its highly anticipated debut on the Main Market, but the opening was not without its challenges. The company's shares opened at 54 sen, slightly below the IPO price of 55 sen per share, amidst a generally subdued market environment.
By 10:00 am, over 14 million shares had already changed hands, indicating significant investor interest. However, the broader market conditions, including the country's benchmark index FBM KLCI, were also lower, which might have influenced the initial performance.
Despite the initial dip, Geohan's managing director, Lee Kim Seng, expressed optimism during the listing ceremony on Friday, stating, 'We are poised to capitalize on the expanding infrastructure sector in Malaysia and the booming construction industry in Singapore.'
The IPO's public tranche was oversubscribed by nearly eight times, and shares set aside for institutional and select investors were fully taken up, demonstrating strong investor confidence in the company's potential.
Geohan successfully raised RM72.6 million through the issuance of 132 million new shares. Notably, there was no offer for sale of existing shares, meaning the company retained full control over the proceeds, and existing shareholders did not cash out their stakes.
The company plans to utilize more than half of the IPO proceeds to expand its machinery fleet, including rotary boring rigs, crawler cranes, and excavators, to boost operating capacity, especially as it expands its customer base in Singapore. Another 35% has been allocated for working capital, with the remaining funds covering listing expenses.
Geohan specializes in foundation and geotechnical works, having completed projects such as Genting Highlands' First World Hotel and infrastructure for the Klang Valley Mass Rapid Transit. The company's expertise and successful IPO indicate a promising future in the construction and infrastructure sectors.
The Alliance Islamic Bank Bhd played a crucial role as the principal adviser, sole underwriter, and placement agent for the IPO, ensuring a smooth and successful listing process.
