The current year 2021 has not been a bumper one for initial public offerings in Jamaica, all of that could change as Santa has one or two gifts on his sleigh to deliver either a few days before Christmas or just after.
Word on the street is that investors should save some of the money earmarked for Christmas gifts and prepare for two Initial Public offerings that could hit the road ahead of Christmas and just ahead of the New Year.
The year is closing fast saw one outstanding offer returning a bid payoff for investors as the Junior Market listed Future Energy Source there were a few in the Main market but they failed to generate any excitement for investors.
ICInsider.com previously reported that the initial public offer of shares in Jamaica Fibreglass Products is expected to come to the Jamaican capital market in October, our source advises, with Spur Tree Spices to come shortly after. We said then that, “Jamaica Fibreglass Products produces fiberglass-based furniture and beddings, with revenues said to be in the region of $600 million, is expected to raise approximately $250 million for expansion purposes. The prospectus of the Metry Seaga-owned company is said to be at an advanced stage of preparation and should be moving through the various stages for approval soon.”
“Spur Tree Spices, with revenues, said to be just over $1 billion, should also be coming in October, if all goes well, intending to pull in $250 million. GK Capital are brokers of the two issues that are slated to list on the Junior Market.”
Various issues seem to have delayed both of the above but the various issue may have been dealt with and the runway is said to be cleared for flights to take off sooner than later.
These two are not the only ones coming. Word is that Mayberry Investments has a few potential IPOs with one or two at advanced stages of readiness to hit the market in 2022. IC Insider.com gathers that one is an IPO to raise around $200 million in the educational line of business and one is for an existing listed company for a fresh capital raise. There are some regulatory issues regarding the structure of reserve shares for the initial public issue, with the FSC is now proposing that the vast majority of an issue must be made to the general public, thus severely limiting the percentage that can be kept for select clients. It is a move intended to squelch the many concerns of investors of being shut out of getting reasonable amounts of issues.
In October this year, the social learning portal Edufocal disclosed that they signed an agreement to engage Mayberry Investments in a move to raise capital. ICInsider.com gathers that the effort will likely bear fruit early in the New Year. The government of Jamaica’s intention to divest their 20 percent holding in JPS is at a fairly advanced stage and could be early in 2022, but that investment could be fraught with potential dynamite for small investors.
Keep watch, they all could be closer than you think.
IPO gifts for Christmas and early New Year
New IPOS expected in October
The initial public offer of shares in Jamaica Fibreglass Products is expected to come to the Jamaican Capital market in October, our source advises, with Spur Tree Spices to come shortly after.
The company produces fiberglass based furniture and beddings, with revenues said to be in the region of $600 million, is expected to raise approximately $250 million for expansion purposes. The prospectus of the Metry Seaga owned company is said to be at an advanced stage of preparation and should be moving through the various stages for approval soon.
Spur Tree Spices, with revenues, said to be just over $1 billion, should also be coming in October, if all goes well, with a view to pull in $250 million. GK Capital are brokers of the two issues that are slated to list on the Junior Market. The prospectus of the company that has been manufacturing seasonings and sauces since 2006 for the local and export markets is also at an advanced stage of readiness, ICInsider.com gathers.
ICInsider.com is informed that the prospectus for one issue is in a draft form currently, so it should be ready to move to the regulators shortly. IPOS are subject to approval, primarily by the Jamaica Stock Exchange and Financial Securities Commission, before the prospectus can be released to the public as such, the exact timing is subject to signing off by them.
One source advised IC Insider.com that there are several potential listing candidates in the Manufacturing sector, with a number of them expressing interest in the listing. Another source advises that there are a number of potential listings in the NCB Capital Markets pipeline. The disruption to business caused by covid-19 is creating delays in some of the issues.
What appears to be a rush to list is a marked departure from the situation that existed before the advent of the Junior Market, with many business owners now seeing the major benefits that listings bring and the usefulness of long term capital.
In the meantime, Sygnus Real Estate Finance IPO that is seeking to sell 207.6 million up sizeable by 38.86 million units to raise a maximum of US$15 million, is extended to Friday, September 10.
Indies Pharma IPO 2.5 times over
Indies Pharma went to the capital market last week Thursday to raise $248.4 million from 174 million shares for its own use while existing shareholders offered 92.5 million units to raise nearly $139 million.
Information reaching IC Insider.com indicates that the offer that closed on Friday attracted some 2,800 applications, covering over than $1 billion and was about 2.5 times oversubscribed. GK Capital the lead broker pulled in about 50 percent of the inflows, our source indicates. The number of applicants sits just below the amount attracted by Victoria Mutual Investments which was in excess of 3,000.
The shares were mostly priced at $1.50 each with lower prices for shares reserved for selected groups. Only 60 million shares were set aside for the general public. The proceed for the shares sold by the company is expected to be used to pay off loans to its parent company and banks, working capital and funds the cost of the issue. The total issued shares currently amount to 1,158,553,500 units and the issue of 173,983,149 shares, raises the total shares to 1,332,536,649 units.
Indies Pharma is a pharmaceutical distribution company out of Montego Bay, which sold its first pharmaceutical 2005, and today distributes over 150 prescription and over the counter pharmaceutical formulations for Bioprist Holdings under the ‘Bioprist’ brand and operates the Trident Pharmacy located nearby in Sam Sharpe Square, Montego Bay.
The chairman and founder of Indies Pharma
The Company currently services customers across the island, including over 400 pharmacies, private and public hospitals and government agencies including the National Health Fund as well as medical practitioners and directly to individuals.
Investors demand has pushed prices in the post IPO period to peak around 15 times current year’s earnings. On this basis, it seems likely that Indies Pharma will peak around $2.5 based on IC Insider.com’s projected earnings in 2018, of 17 cents per share, it could go higher with the high level of applicants for the shares.
For the half year to April, revenues rose 10 percent to $301 million over the similar period in 2017 but profit is only up 6 percent to $73 million from $69 million before tax. IC Insider.com’s forecast is for a 16 percent increase in pretax profit to $200 million for the current year. The company could pick up additional sales and profit as a result of the publicity that emanates from the IPO and subsequent listing.