KUALA LUMPUR: Integrated circuit (IC) design provider Oppstar Bhd, en route to an ACE Market listing on March 15, 2023, targets RM104.25 million from its initial public offering (IPO) via the issuance of 165.48 million new ordinary shares.
At an issue price of 63 sen per share and an enlarged share capital of 636.20 million shares, the company will have a market capitalisation of RM400.81 million upon listing.
During the unveiling of the IPO prospectus today, executive director/CEO Ng Meng Thai said Oppstar has earmarked 47.96% or RM50 million of the proceeds for the expansion of its workforce.
“This will enable Oppstar and its subsidiaries to cater for the next phase of business expansion,” he said in a press conference at the ceremony.
Meanwhile, 23.98% or RM25 million is allocated for the establishment of new offices.
“We plan to strengthen our regional presence by setting up offices in India, Singapore and Taiwan to provide efficient support for our regional customers,” he said.
Another 11.51% will be for research and development expenditure along with 12.14% to be channelled towards working capital. The remaining proceeds will be for listing related expenses.
Ng said the IPO will be instrumental in enabling it to expand existing capability in IC design services which will in turn allow it to compete for more orders tapping into the large pool of potential customers previously not accessible to them.
He added that it expects double digit growth for this financial year as the demand for IC design has grown at an exponential rate over the years.
“Based on the report from our Independent Market Researcher, the industry remains robust with the demand for technological advancements as well as the increasing uptake of IC design services by many semiconductor companies such as integrated device manufacturers, fabless companies, fab-lite companies and external design houses given its increased complexity and higher cost involved,” he said.
In addition, the group intends to declare a yearly dividend of at least 25% of its profit after tax.
The public issue portion of the IPO is available from yesterday to March 3.
Affin Hwang Investment Bank officer-in-charge Ng Meng Wah commented: “Given its track record and expertise, we believe Oppstar’s move towards an IPO will also raise the group’s corporate profile as it embarks on the next phase of its business expansion plans”
Affin Hwang Investment Bank is the principal adviser, sponsor, sole placement agent and sole underwriter for the IPO exercise.