Logistics firm Evocom falls 30% on Bursa debut

 Its shares fell as much as 5.5 sen below its IPO price of 18 sen on its ACE Market debut.

Evocom Bhd’s disappointing debut was not totally unexpected given the relatively weak public demand for its IPO shares. (Bernama pic)

PETALING JAYA:

Evocom Bhd fell as much as 30% on its debut on the ACE Market today, trading significantly below its initial public offering price.

The counter opened at 15 sen before falling to its intraday low of 12.5 sen, 30.5% or 5.5 sen below its IPO price of 18 sen. It edged up slightly to close 27.8% or 5 sen lower at 13 sen.

At the price, the logistics and workforce solutions provider has a market capitalisation of RM59 million. It was the third most traded stock on Bursa Malaysia with 71.8 million shares changing hands.

Evocom’s lacklustre debut was not totally unexpected given the relatively weak demand for its IPO shares. The public portion was oversubscribed by just 3.6 times, while a certain portion of the IPO was undersubscribed and had to be reallocated to other categories of investors.

Headquartered in Semenyih, Selangor, Evocom raised about RM20.5 million from its IPO through the issuance of 113.9 million new shares.

More than one-third of the proceeds have been earmarked as working capital for its cash-intensive staffing service. The company is also allocating another 30% to develop its technology application and expand its air freight transhipment business.

Evocom is also setting aside 7% to set up its new headquarters in Nilai, Negeri Sembilan, and another 7% as general working capital. The rest will be used to cover listing expenses.

The company was founded by its CEO Ian Tan, who cashed out RM3.96 million from an offer for sale of his 22 million existing shares.

The company supplies manpower to support the logistics operations of online commerce platforms. It also provides network support services including last-mile delivery, transhipment and parcel shipment service.

SPX Express, the in-house delivery arm of e-commerce platform Shopee, accounts for over 80% of its annual revenue. It also serves as the manager for two of Lazada’s distribution hubs. It was granted a licence to provide international inbound courier service last year.

NewParadigm Securities was the IPO’s principal adviser, sponsor, sole underwriter and sole placement agent. - FMT