KUALA LUMPUR: Nestcon Bhd, a building and infrastructure construction services provider, made a firm debut on the ACE Market of Bursa Malaysia on Tuesday, opening at 30 sen or two sen above its offer price of 28 sen.

       There were 9.14 million shares done in early trade.

       At 9.03am, it was trading at 33 sen. There were 86.96 million shares done at prices ranging from 30 sen to 34 sen.

       Overall market sentiment was cautious.

       The FBM KLCI was down 1.9 points or 0.12% to 1, 542.81. Turnover was 267 million shares valued at RM82.98mil. There were 185 gainers, 106 losers and 244 counters unchanged.

       Under its listing exercise, the public portion of its initial public offering (IPO) was oversubscribed by 57.13 times.

       Its listing entailed a public issue of 160.96 million new ordinary shares at an issue price of 28 sen per share, representing 25 per cent of its enlarged share capital.

       The IPO raised RM45mil in proceeds, along with an offer for the sale of over 32 million existing shares.

       It will use RM6mil (13.3%) to set up an industrialised building system (IBS) plant for the

       building division; RM6.6mil (14.7%) to purchase machinery and equipment; RM16.5mil (36.6%) is earmarked for repayment of bank borrowings; RM11mil (24.3%) for working capital needs; and RM1mil (2.2%) to upgrade software and systems. The remaining RM4mil (8.9%) is to defray listing expenses.

       Group managing director of Nestcon, Datuk Dr Lim Jee Gin said, “We are extremely pleased to celebrate this important milestone of becoming a public listed entity after many years of hard work.

       “This, however, is not the end but the beginning of an exciting journey for Nestcon as we set sight

       on further enhancing our status as a reputable and trusted construction player in the industry.”

       “At Nestcon, we pride ourselves as being equally competent in both our building segment as well as our civil engineering and infrastructure segment.

       “Thus, we want to continue to bolster both divisions to solidify our market position as a comprehensive construction company. On that note, we are also looking to expand our portfolio to include new projects like renewable energy works.”

       Lim said the macro level, it is optimistic about the construction industry backed by government-led initiatives and spending relating to infrastructure and housing developments.

       Nestcon recorded revenue of RM95.6mil in 1Q ended March 31, 2021 while net profit was RM3.7mil, translating into a net profit margin of about 3.9%.

       The company said its orderbook is RM1.9bil, of which RM1.2 billion remains unbilled. It has 51 tenders valued at around RM2.8bil, which it is confident in clinching a sizable amount.

       For the IPO exercise, M&A Securities Sdn Bhd is the adviser, sponsor, underwriter, and placement agent, while Eco Asia Capital Advisory Sdn Bhd is the financial adviser.