Vetece shares double on ACE Market debut
KUALA LUMPUR (Aug 28): Vetece Holdings Bhd (KL:VTC) shares doubled on their ACE Market trading debut on Wednesday, following strong demand for the enterprise information technology (IT) company’s initial public offering (IPO).
Vetece opened at 50 sen apiece, a 100% surge on a volume of 6.99 million shares, compared to its IPO price of 25 sen per share. By 9.10am, the stock was trading at 45 sen after more than 25.61 million shares changed hands, giving it a market capitalisation of RM176.4 million.
Vetece saw strong demand during its IPO, with the offering oversubscribed by 187.41 times. The new shares allocated to eligible persons and selected investors were fully subscribed, and the offer for sale of existing shares was also fully taken up. The IPO raised some RM34.3 million.
The IPO price of 25 sen valued the company at about 14.9 times its profit after tax for the financial year ended Aug 31, 2023 of RM6.6 million.
Vetece mainly provides software for businesses, including implementation, maintenance, support and professional services as well as resale of hardware and software. The company’s clients are mostly in the telecommunications and financial services industries.
Telekom Malaysia Bhd (KL:TM) is the single-largest client for Vetece, accounting for more than half of its revenue so far this year. The company also counts Telstra Corp Ltd in Australia and banks in Malaysia as its clients.
“As the world rapidly transitions towards a digital economy, the adoption of new technologies like 5G, artificial intelligence, cloud computing, the Internet of Things and big data analytics are becoming increasingly prevalent among businesses seeking to maintain a competitive edge," Vetece non-independent executive vice chairman Vernon Tee Chee Chiang said during the listing ceremony here.
This technological surge is expected to fuel demand for enterprise IT solutions services, he noted.
“We aim to broaden our network of technology partners to enhance our product offerings and extend our client base locally and overseas. This strategic expansion will strengthen our capabilities in enterprise application integration, enterprise data engineering and analytic solutions," Vetece non-independent executive director and chief executive officer Chan Wai Hoong added.
Vetece has set aside about 27% of the proceeds to pay hardware and software licensing fees from the sale of new shares that raised RM24.5 million. The company has also earmarked about 9% of the proceeds to roll out new core products and services, and 13% to strengthen its Singapore operations.
Vetece also allocated 15% of the proceeds for the establishment of a centre-of-excellence for software, 16% for loan repayment, and the rest to defray estimated listing expenses.
Meanwhile, the offer for sale of 39.20 million existing shares through private placement to select investors is expected to gross RM9.8 million, which would accrue entirely to Tee.
Kenanga Investment Bank is the principal adviser, sponsor, underwriter and placement agent for the IPO.
The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.
Related Stocks
Comments