SINGAPORE: Home-grown real estate group PropNex jumped as much as 22 per cent on its first day of trading on Monday (Jul 2), as investors tapped on the positive sentiment surrounding the property sector.
The counter, which began trading on the mainboard at S$0.685, rose to an intraday high of S$0.79 before closing up 10 per cent at S$0.715.
PropNex’s IPO was priced at S$0.65 apiece. The public tranche of about 2.1 million units was 24.6 times subscribed, while the placement tranche of nearly 40.4 million shares was fully placed.
PropNex’s debut comes amid positive sentiment in the property sector.
Flash estimates released by the Urban Redevelopment Authority (URA) on Monday showed that private home prices rose to a four-year high in the second quarter, with analysts forecasting that values could reach the 2013 peak in the next quarter or two.
The company has said that it intends to use the IPO gross proceeds of about S$40.9 million on several things, including expanding the business locally and regionally and enhancing its real estate brokerage business.
“Our IPO … provides a platform for PropNex to not only further solidify our position in Singapore, but also access to the capital market to expand our business into new consultancy services as well as promising geographical markets, such as Vietnam and other Southeast Asian countries,” said PropNex co-founder Ismail Gafoor.
With a market capitalisation of about S$240 million, PropNex will boost SGX’s real estate cluster to a total of 110 listings, with a combined market capitalisation of about S$179 billion.
According to the prospectus, PropNex is Singapore's largest home-grown real estate agency. The company is also a leading project marketing agency, with market shares of 42.7 per cent and 45.3 per cent of the residential primary private market and residential HDB resale market respectively.
The company has 7,248 salespersons.
“Investors in Singapore are well-attuned to investing in real estate, and this listing will provide investors with another opportunity to tap on the property cycle in Singapore and in overseas markets where PropNex has presence,” said Mr Simon Lim, head of equity capital market (sectors) at SGX.