Johor Plantations Group Bhd non-independent non-executive chairman Tan Sri Dr Ismail Bakar (fifth left), managing director Mohd Faris Adli Shukery (sixth left) and delegates at the listing ceremony of the company on the Main Market of Bursa Malaysia on Tuesday. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (July 9): Johor Plantations Group Bhd (KL:JPG) ended its maiden trading day on Tuesday with a 7.14% gain after the palm oil producer raised RM735 million from the country’s largest initial public offering (IPO) in more than two years.

Johor Plantations opened at 84 sen, unchanged from its IPO price, before dipping to 83 sen. The stock climbed to as high as 93 sen during the day and finally settled at 90 sen at the closing bell, valuing the company at RM2.25 billion based on an enlarged share capital of 2.5 billion shares

The newly listed stock was also the most active stock on Bursa Malaysia, with 178.24 million shares traded.

The IPO is the largest in terms of proceeds since Farm Fresh Bhd (KL:FFB) raised RM1 billion in March 2022, and the second listing of a plantation company since MKH Oil Palm (East Kalimantan) Bhd (KL:MKHOP) in April, which grossed RM155.43 million.

Demand for Johor Plantations’ IPO was decent. The public tranche was oversubscribed by 2.18 times by the Malaysian public, while shares set aside for eligible persons were fully subscribed.

The offer for sale was also fully taken up by Bumiputera and institutional investors. The IPO was also backed by seven cornerstone investors — including Retirement Fund Inc (KWAP), abrdn, and AHAM Asset Management — who agreed to buy 40.8% of the institutional offering, while the remaining shares available for bookbuilding were covered 5.19 times.

Cornerstone investors — typically large institutional investors — commit to take up a big chunk of IPO shares before they are marketed to other retail and institutional investors. Their presence helps to build up other investors’ confidence for the shares during an IPO.

For Johor Plantations, the public issue raised RM389.76 million, of which more than half was earmarked for capital expenditure, including the construction of an integrated sustainable palm oil complex and replanting activities. The rest will go towards repaying bank borrowings, as working capital, and to defray listing expenses.

The offer for sale, meanwhile, raised RM345.2 million, which accrued entirely to the selling shareholder, Kulim (Malaysia) Bhd — a wholly owned unit of state-owned Johor Corp — which retained a 65% stake in Johor Plantations after the listing.

RHB Investment Bank Bhd is the principal adviser, joint global coordinator, joint bookrunner, managing underwriter and joint underwriter for the IPO. AmInvestment Bank Bhd and CIMB Investment Bank Bhd are joint global coordinators, joint bookrunners and joint underwriters.

CLSA Singapore Pte Ltd and CLSA Securities Malaysia Sdn Bhd are the joint global coordinators and joint bookrunners. Meanwhile, Affin Hwang Investment Bank Bhd is a joint bookrunner and joint underwriter.