KUALA LUMPUR: Successful applicants to Well Chip Group Bhd
's initial public offering (IPO) had reason to celebrate as shares in the Johor-based pawnbroker surged over 50% in their trading debut on Bursa Malaysia's Main Market.
The trading stock opened at RM1.65 a share, representing a 50 sen or 43.48% jump over its IPO price of RM1.15.
At its highest, the share was trading at a 52.17% premium of RM1.75 apiece.
Well Chip had raised RM172.5mil from its IPO, which it will utilise as cash capital for its exiting 23 pawnshops, as well as to open seven new pawnshops and pay off the listing expenses.
Of the seven new outlets, the group said it will solidify its presence in Johor via the opening of five new stores and while another two will be launched in Melaka.
Well Chip, which says it cater to an underserved market of people who are in need of fast cash, mainly deals in gold and related items as collateral to facilitate cash lending to the underserved and unserved segments of society.
The group said it earns a maximum 2% margin on the amount it lends out, and it will lend up to 60% to 70% of the retail value of the gold price.
Based on its IPO reference price of RM1.15, the group floated on the local bourse with a market capitalisation of RM690mil.
