Pan Merchant IPO's retail portion only 37% subscribed
The Edge Malaysia - 23 June 2025 View original article
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KUALA LUMPUR (June 23): Industrial filters manufacturer Pan Merchant Bhd’s (KL:PMIBHD) initial public offering (IPO) saw weak public demand, with only 37% of public shares subscribed ahead of its June 26 debut on the ACE Market. However, the placement shares were fully taken up after applying clawback and reallocation provisions.
According to the company’s press release, the public tranche received 1,107 applications for 16.9 million shares, worth RM4.6 million, against the 45.8 million shares allocated to Malaysian retail investors.
The breakdown shows:
Bumiputera portion: 449 applications for 4.34 million shares, or 19% subscribed (out of 22.9 million shares).
Non-Bumiputera portion: 658 applications for 12.59 million shares, or 55% subscribed (out of 22.9 million shares).
The unsubscribed 28.9 million shares will be fully underwritten by Affin Hwang Investment Bank.
The fully taken up placement shares include:
57.3 million shares placed with selected investors.
114.5 million shares were placed with Bumiputera investors under the Ministry of Investment Trade and Industry allocation.
Weak retail demand came after research firms disagreed on the company’s value at the 27 sen IPO price. Two firms said it was overpriced, suggesting 25 sen and 23 sen, due to its small size, market share, and global trade risks. One firm valued it higher at 33 sen, citing its cost advantage and strong pricing compared to competitors.
Pan Merchant managing director Wong Voon Ten said the IPO launch happened during a time of market uncertainty due to global tensions, which affected investor interest. Still, he remains confident in the company’s future, noting its 38-year track record and commitment to long-term growth.
“We believe that as we execute our growth plans and deliver solid financial performance, investors will eventually recognise our value and look back at this moment as the beginning of a compelling growth story,” he said.
The group also reaffirmed its dividend policy, targeting a minimum distribution of 30% of annual audited profit after tax attributable to shareholders — demonstrating its commitment to shareholder value.
Headquartered in Malaysia, Pan Merchant operates three manufacturing facilities in Ipoh, Perak, and exports over 80% of its products to Asia, Europe, the Americas, and Africa. The group also maintains offices in Singapore, the Netherlands, and the US, serving clients in industries such as edible oil refining, food processing, sustainable fuel production, and water treatment.
The company is raising RM62.69 million under the public issue. Of this, 45% has been earmarked for capital expenditure on its manufacturing plants, including the acquisition of machinery, tools, and facility upgrades.
A further 11% is allocated for product development, close to 10% for business expansion in the Netherlands, 23% for working capital, and the remaining 11% for listing-related expenses.
An offer for sale via private placement will raise up to RM4.86 million for Budhi Sentoso Rachmat, co-founder of Pan Merchant’s subsidiary, PMI-Technology Sdn Bhd.
Post-listing, Pan Merchant is expected to achieve a market capitalisation of RM247.32 million based on an enlarged share capital of 916 million shares.
Affin Hwang Investment Bank is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO.
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