Mr DIY planning RM1.5bil IPO

Going public: Mr DIY employs more than 4,000 workers, with each of its store space encompassing an average of 10,000 sq ft.

PETALING JAYA: Mr DIY, Malaysia’s biggest home improvement retailer, is planning to launch an initial public offering (IPO) either in Malaysia or Hong Kong in the fourth quarter of this year, says Creador Sdn Bhd chief executive officer Brahmal Vasudevan.

Private equity firm Creador is an investor in Mr DIY, which emerged some three years ago. It owns an 18% stake in the company, while the remainder is held by the company’s founders.

Sources said Mr DIY is looking to raise RM1.5bil via the IPO.

The company, which is only looking to list its Malaysian business, is targeting a valuation of RM10bil, potentially making it the 35th largest company by market capitalisation should it be listed on Bursa Malaysia,

The home retailer is identifying underwriters and bankers, and has so far shortlisted Malayan Banking Bhd, CIMB Group Holdings Bhd, RHB Bank Bhd, Credit Suisse and JP Morgan, added the source.

Last year, Mr DIY grew by 35% and made a net profit of RM300mil on the back of RM1.8bil in revenue. This would put the retailer in the 47th spot in terms of profitability on Bursa Malaysia.

The listing of Mr DIY on Bursa Malaysia would boost the Malaysian capital market, which is in need of a catalyst. In recent years, the local bourse has barely attracted big new listings.

Mr DIY’s rapid growth over the last decade can be attributed to a business model that emphasises affordable pricing and a wide variety of products. Mr DIY has between 10,000 and 15,000 stock-keeping units throughout its 500 stores in Malaysia.

The home retailer serves some 110 million customers a year, with an average of 10 million customers walking into its stores per month. The company is looking to double the number of stores in Malaysia over the next five years.

As for its international presence, Mr DIY had expanded its operations to Thailand, Brunei and Indonesia.

From its humble beginnings in Jalan Tuanku Abdul Rahman, Kuala Lumpur, Mr DIY was initially set up as a hardware shop in 2005, before transforming to become more all-inclusive.

From household products to electrical items, it has become the largest “department store” chain with housewives forming the bulk of its customer base.

The company employs more than 4,000 workers, with each of its store space encompassing an average of 10,000 sq ft.

The company retails a variety of household, hardware and electrical products. For its next engine of growth in Malaysia, Mr DIY will be jumping on the e-commerce bandwagon.

The company has devised a comprehensive e-commerce strategy that is expected to yield a 20-time uplift in the number of online orders compared with when it launched its online store some 14 months ago. This strategy will be launched in phases.

The company has also invested in a new 15,000-sq-ft warehouse, which is able to store more than 20,000 products. This is a huge improvement from its previous warehouse, which was 800 sq ft.

While Mr DIY has its own webstore, it has also moved to e-commerce platforms such as Shopee with a user base of 16 million to grow sales.

It leverages on Shopee’s lower price guarantee, free shipping programme and key campaign periods to have a competitive edge over other sellers and attract customers.