There hasn’t been a high-profile IPO for a while already especially in the distressed economy. That is until Maxis announced their coming initial public offering (IPO) of 2.25 billion shares (30% of their total equity) at a price of RM5.20 per share.
Now, investors all over are waiting with bated breath for the magical date of 19 November 2009 when Malaysia’s top telecommunications company lists on the Bursa Malaysia. Will it be largely oversubscribed? It certainly looks to be heading in that direction. At approximately RM10.8 billion to be raised, it is the biggest listing in South East Asia in decades and the markets are certainly hungry for fresh and promising listings. Read on to see if you should invest in Maxis shares.
Lucky Maxis post-paid subscribers are given blue forms to complete which I have been told have at least an 80% chance of being lucky. Otherwise, mere mortals will need to consider picking up pink forms or buying it directly off the market once the stock lists although you might want to be prepared for quite a large premium especially on the first day of listing.
Should You Subscribe To The Maxis IPO?
Analysts are encouraging investors to consider subscribing, based on Maxis’ solid fundamental execution, superior margin and robust dividend growth. Interestingly though, OSK has placed the stock’s fair value has been placed between RM5.30 to RM5.80, derived from a projected 2010 price earnings multiple of 14.8 to 16.2 times. Other analysts are less optimistic believing that the IPO price is too high. (source)
Based on the analysis, the IPO price at RM5.20 does not offer much upside potential although a robust dividend payout is still likely over time. All in all, it still appears to be a fairly stable stock and one that promises potential dividend growth. It does not come at a cheap price but then again, good stocks rarely come cheap!
Good luck and do ensure you speak to your remisier before you invest.