Azam Jaya surges 28% on Main Market debut

• Demand from the public exceeded the available shares for subscription by some 23 times.

KUALA LUMPUR (Nov 11): Shares of Azam Jaya Bhd (KL:AZAMJAYA) surged 28% on their trading debut on Monday, after the construction firm’s initial public offering (IPO) raised over RM100 million on the back of strong investor demand.

Sabah-based Azam Jaya opened at RM1 versus its IPO price of 78 sen per share. The stock climbed to as high as RM1.12, before easing to RM1.08 at 9.05am, after more than 17 million shares changed hands. At its last price, the company had a market capitalisation of RM540 million.

“As part of our long-term strategies to build on our success, we plan to enhance our construction capabilities, thus strengthening our capacity to take on larger projects,” Azam Jaya executive director Datuk Jessica Lo Vun Che.  

Monday’s jump follows strong demand during Azam Jaya’s IPO, as investors snapped up shares on offer. Demand from the public exceeded the available shares for subscription by some 23 times.

New shares set aside for eligible persons were also fully subscribed, while private placements of both issue shares and existing shares to select investors were also fully taken up.

Azam Jaya mainly builds road infrastructure, including roads, highways, bridges, flyovers and tunnels, in Sabah. The company is currently working on eight projects with an unbilled contract value totalling RM1.08 billion.

From the proceeds from the sale of new shares totalling RM61.5 million, Azam Jaya has allocated RM28.4 million as working capital for construction projects and RM20 million to repay bank borrowings.

The company has also earmarked RM8 million to boost construction capabilities and operational efficiencies by acquiring new machinery and equipment, as well as technological upgrades. The rest will be used to defray listing expenses.

Proceeds from the sale of existing shares, amounting to RM39 million, went entirely to chairman Tan Sri Joseph Lo @ Lo Tain Foh and his son Datuk Jonathan Lo Chaw Loong, who is also Azam Jaya’s managing director.

Inter-Pacific is the principal adviser, sole underwriter and sole placement agent for the IPO.

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