Farm Fresh shares up 26% after $0.24 billion IPO

Shares in the company, which raised $0.24 billion in its IPO, rose as high as 34 per cent in the first few minutes of trading

Shares in Malaysian dairy producer Farm Fresh Berhad opened 26 per cent higher than the offer price at its market debut on Tuesday, in the country's largest listing since July last year.

Shares in the company, which raised 1 billion ringgit ($0.24 billion) in its initial public offering (IPO), rose as high as 34 per cent in the first few minutes of trading.

Credit reporting firm, CTOS Digital Bhd, had launched a 1.2 billion ringgit ($0.28 billion) IPO last July.

Group Managing Director and Chief Executive Loi Tuan Ee said Farm Fresh will use proceeds raised to establish a new manufacturing hub, a dairy farm and an integrated processing facility in Malaysia, as well as expanding its Australian production facility and venture into neighbouring regions.

Our listing today is a great milestone in our journey towards becoming a regional player, he said.

Farm Fresh plans to export to Hong Kong, Indonesia and the Philippines.

The company said last month it had secured a record number of cornerstone investors in a Malaysian IPO, with 30 local and regional asset management firms, insurers and funds such as AIA, JPMorgan Asset Management and the Employees Provident Fund.

Farm Fresh, which has a unit of sovereign wealth fund Khazanah Nasional Bhd among its investors, is reviving the IPO market in Kuala Lumpur at a time of slow activity in traditional venues due to rising interest rates and Russia’s invasion of Ukraine. It’s the third company to list in the Bursa Malaysia this year and the largest since CTOS Digital Bhd more than eight months ago.

The IPO allowed ‘investors to have exposure in defensive or non-cyclical stocks amid prevailing market volatility with the escalating Russia-Ukraine tensions and rising interest rate atmosphere,’ analysts at JF Apex Securities Bhd wrote in a note before the shares started trading.

CIMB Investment Bank was the sole principal adviser and joint global coordinator on the deal.