KUALA LUMPUR: Mercury Securities Group Bhd aims to raise RM39.27 million from its initial public offering (IPO) to support its expansion and digitalisation plans.
Of the proceeds, 68.39% or RM26.86 million will be allocated for expanding margin financing facility services. Meanwhile, 7.33% will be dedicated to enhancing the digitalisation programme and marketing activities in the stockbroking business and operations of the group. Additionally, RM4.63 million is allocated for working capital, and RM4.90 million for listing expenses.
Mercury, through wholly owned subsidiary Mercury Securities Sdn Bhd, is principally involved in the provision of stockbroking, corporate finance advisory services and other related businesses such as margin financing facilities services, underwriting and placement services, as well as provision of nominee and custodian services.
Regarding expanding its margin financing facility services, Mercury Securities managing director Chew Sing Guan said these operations currently contribute 21% to total income.
“We believe margin financing still has a very good margin ... this is probably the best return for our buck. Meanwhile, for trading and execution, the income is not as pronounced. So, margin financing is the best and easiest ... (which is why the majority of the IPO proceeds will go to margin financing facility services),” he told a media conference at its prospectus launch today in conjunction with its IPO and listing on the ACE Market of Bursa Malaysia .
Chew said: “In terms of our digitisation programme, it is for our back office process system, which needs more automation so it is less reliant on humans.”
He added hat Mercury has been profitable every year since it started operations in 1992.
Currently, the highest profit margin is derived from the stockbroking segment, accounting for about 60% of segmental profit, while the rest is from corporate finance.
Mercury is the first stockbroking company to seek and gain an IPO listing in Bursa in the last 20 years.
“We plan to leverage this listing to continue to innovate, digitise and expand our product and service offerings,” Chew said.
Upon its listing, Mercury Securities will have a market capitalisation of RM223.25 million based on the issue price of RM0.25 per share and its enlarged issued share capital of 893 million shares.
Public Investment Bank is the principal adviser, sponsor, sole underwriter and sole placement agent for Mercury’s IPO exercise.