OB Holdings eyes RM28.8mil from ACE Market IPO

KUALA LUMPUR: OB Holdings Bhd aims to raise RM28.8mil from its initial public offering (IPO), en route to an ACE Market listing on Oct 29.

The food and beverage (F&B) and supplement manufacturer plans to issue 120 million new ordinary shares at 24 sen a piece. Upon listing, OB Holdings will have a market capitalisation of RM94mil.

Managing director Teoh Eng Sia said the proceeds raised will be used to repay bank borrowings related to the construction of a new manufacturing factory in Serendah, Selangor.

“The new factory will give us a larger manufacturing space, allowing us to customise the factory layout and optimise the configuration of the machinery,” he said.A total of RM14.9mil will be allocated towards that end, with the first phase of construction covering some 210,420 sq ft of land expected to be completed in the first half of 2025, with operations scheduled to begin the following year.

The second phase, which will involve an additional 44,843 sq ft, is planned for future expansion.

Teoh said RM5mil from the IPO proceeds will be allocated towards purchasing new machines to expand the group’s manufacturing capacity. The remaining funds will be used for general operational purposes, including RM1mil for marketing and advertising activities, and RM3mil for working capital requirements.

Teoh noted that the group is well-positioned to benefit from the continued growth of the fortified F&B and dietary supplement industry, which registered a compound annual growth rate of 7.43% from 2018 to 2023. “The industry is growing every year and correspondingly, we are growing within the space,” he noted.

Exports contributed RM4.7mil or 9.2% of OB Holdings’ total revenue of RM50.9mil in financial year 2024.