DBD Engineering Plc, a local multi-purpose engineering and construction firm, went public via initial public offering (IPO) on the Cambodia Securities Exchange’s (CSX) Growth Board on September 6.
DBD has secured a place in history as the first company to list an IPO on the bourse’s secondary board, remarked managing director Neang Vithy.
“I am very proud of this achievement – the company was able to successfully issue an IPO during this difficult time.
“I would like to express my deep gratitude to all the investors who have supported and trusted DBD, which has led to this successful issuance,” he said, noting that the IPO was oversubscribed. This means that more orders were placed than there were shares available – a characteristic sign of investor confidence in the future of the company.
All 6,461,538 shares of the stock on offer were sold ahead of its debut, at 2,380 riel ($0.58) per unit to raise more than $3.84 million during a subscription period running from July 26 to August 18, DBD and IPO underwriter (or manager) SBI Royal Securities Plc (SBIR) noted in a joint filing to the CSX on August 27.
The Growth Board was launched late in 2015 as a secondary platform to lift some of the barriers for listing and cater more to companies with less access to capital or financial resources. But it had failed to attract a single issuer over the years, even as the Main Board witnessed increasing growth.
Vithy went on to say that DBD has garnered much confidence over the years, prompting the company to explore prospects of expanding business operations.
He said the company’s Growth Board debut would not only provide the capital needed to grow and develop, but also to meet consumer demand and complement the firm’s efforts to unlock the growth potential of the construction industry, which as he pointed out, contributes significantly to Cambodia’s economic growth.
He suggested that by listing on the CSX’s secondary board, DBD would also gain the distinction as a company with strong financial stability and transparency that is in full compliance with applicable regulations.
On the other hand, he said, the move will also encourage other companies to issue IPOs on the board and lend a hand in the development of the Cambodian securities sector.
Speaking at the IPO ceremony, Securities and Exchange Regulator of Cambodia (SERC) director-general Sou Socheat lauded the debut as a “new phase in the evolution” of the CSX.
He said the Growth Board’s inaugural IPO “reflects the will of public investors and also showcases the market confidence that has been developing, which allows us [the securities sector] to be a gateway to diversify corporate financing”.
“This is also an investment opportunity for our public investors”, he suggested.
Noting that other companies are following in DBD’s footsteps with plans of their own to enter the Cambodian stock market, Socheat encouraged the newly-listed firm to act as a responsible role model.
“I urge DBD Engineering Plc and SBI Royal Securities to remain attentive and strictly follow the laws, regulations and other requirements as a listed company so as to maintain order and efficiency, and especially to retain investor confidence,” he said.
On July 22, the CSX granted approval in principle of real estate developer JS Land Plc’s equity securities listing eligibility review application for trading on the Growth Board. JS Land is poised to become the second company to list on the bourse’s secondary board, after DBD.
Ministry of Economy and Finance secretary of state Hean Sahip congratulated DBD on its successful listing of the stock on the Growth Board, describing the company’s presence on the Growth Board as another indicator of CSX’s contributions and support of small- and medium-sized enterprises.
He said listing on the board would provide enterprises with access to a new “inexhaustible” source of financing at relatively low cost that is in conformity with the soon-to-be-launched Post-Covid-19 Economic Recovery Plan 2021-2023.
The plan is geared towards attaining sustainable economic growth, and aims to “enhance competitiveness and economic diversification, especially of strong industrial bases with high export capacity that are more closely integrated into regional and global supply chains”, Sahip said.
The CSX now has 14 listed securities – eight stocks and six bonds.