KUALA LUMPUR: Home improvement retailer MR D.I.Y. Group (M) Bhd is raising up to RM1.5 billion via initial public offering (IPO) exercise with a total issuance of 941.5 million shares at RM1.60 per share.
The issuance represents about 15 per cent of the company's enlarged issued share capital, comprising an offer for sale of up to 753.09 million existing shares and a public issue of 188.40 million new shares.
With an estimated market capitalisation of RM10 billion upon its listing on the main market of Bursa Malaysia, MR D.I.Y. said the bookbuilding will last for seven working days, before pricing on October 14 and listing on October 26 this year.
The IPO will raise about RM301.4 million from the public issue of 188.4 million new shares, of which RM276.1 million will be utilised for the repayment of bank borrowings, while the remaining RM25.3 million will be to defray the estimated listing expenses.
Chairman Datuk Azlam Shah Alias said the company's broad product mix with an accessible price point and high-growth retail locales had enabled it to be resilient and steadfastly profitable despite the challenging market.
"In a capital market starved of quality issues offering a more-than-decent growth and return profile, MR. D.I.Y. stands out among its peers both on a domestic and international basis," he said at a virtual press conference after launching the company's prospectus today.
The company has adopted a dividend policy that targets to return 40 per cent of its earnings to shareholders.
"We grew from one store to 670 stores in Malaysia, with another four in Brunei. All anchored on the promise of 'Always Low Prices'. We are now the largest home improvement retailer in Malaysia," he said, adding that the company had opened 70 MR D.I.Y. stores this year.
Chief executive officer Adrian Ong Chu Jin said MR D.I.Y. was confident about its long-term prospect despite the ongoing Covid-19 pandemic.
"In short term, it is difficult to predict of the specific impact on the pandemic. But we are excited in the long-term of the nature of our business.
"We add stores at fast pace. As of December 2019, we have 593 stores, we will add another 307 stores in the next two years. This suggests that we have confidence in our long-term nature of our business," he said.
MR D.I.Y. plans to open about 200 new stores in the next two years (2020 and 2021) including an additional 30 stores by December 31 this year.
Ong said MR D.I.Y. group had posted an aggregate revenue of RM465.6 million between May and June 2020 in the post-Movement Control Order (MCO) period.
This was 12 per cent higher than the aggregate revenue of RM416.1 million recorded between January and February this year.
Founded in 2005, MR D.I.Y. has a strong track record of growing its store network with plans to open an aggregate of about 307 new stores across all its brands in 2020 and 2021, expanding its portfolio by 52 per cent from 593 stores as at December 31, 2019.
According to Frost & Sullivan, the Malaysian home improvement market was expected to be worth RM12.5 billion by 2024, growing at a compounded annual growth rate (CAGR) from 2019 to 2024 of 10.2 per cent (higher than the retail segment of 5.7 per cent over the same period).
MR D.I.Y. is a market leader with an estimated 29.1 per cent market share in Malaysia last year.
It offers products in vast categories including hardware, household and furnishing, electrical, stationery and sports equipment, and others (such as toys, car accessories, jewellery, cosmetics, food and beverage items).