DBD Engineering Plc sold all 6,461,538 shares on offer ahead of its initial public offering (IPO) listing, which the company expects by next month, as it gets set to emerge as the first firm to go public on the Cambodia Securities Exchange’s (CSX) Growth Board.

The shares were sold at 2,380 riel ($0.58) per unit to raise more than $3.84 million during the July 26-August 18 offer period, which closed with oversubscription, or more orders than shares available – a sign of investor confidence in the future of the company.

Around 3.4 million shares were sold to strategic investors and the remainder went to individual investors, according to SBI Royal Securities Plc (SBIR), the underwriter or manager of the IPO.

The Securities and Exchange Regulator of Cambodia (SERC) on August 25 approved the results of the subscription offer and the refund list, SBIR said, adding that investors who would not be getting the shares they paid for would be refunded, a process it said began on August 27.

SBIR managing director Seng Chan Thoeun told The Post on August 29 that there was no book-building process for the IPO and that the price was set based on the equity valuation report by SBIR, DBD and main investors.

“As a normal marketing process and before we open the subscription, we need to find strategic investors. However, based on the current demand status, I believe only retail investors could take the whole IPO without needing prior support from strategic investors,” he said.

However, demand from retail investors is “so strong now”, he pointed out. “That is the reason I said, just only retail investors are enough to support the whole IPO.”

Chan Thoeun said the listing date ultimately depends on the CSX, but added that he expects it to be this week, or early next week.

Speaking at a virtual IPO roadshow on July 19, DBD managing director Neang Vithy noted that the company was established in 1995 to provide quality water, electricity and air conditioning services to hospitals and houses, which have garnered continuous support from customers.

DBD received final approval for the IPO from the SERC on June 24, he said, adding that the company had won the first iteration of the “Excellence Programme”, organised by the regulator in 2018.

“I strongly hope that DBD will receive the support of investors, which will allow DBD to take a successful step on the Cambodia Securities Exchange and expand its business potential,” he said.

On July 22, the CSX granted approval in principle of real estate developer JS Land Plc’s equity securities listing eligibility review application for trading on the Growth Board. JS Land is poised to become the second company to list on the bourse’s secondary board, after DBD.

The Growth Board was launched in late 2015 as a secondary platform to lift some of the barriers for listing and cater more to companies with less access to capital or financial resources. But it had failed to attract a single issuer over the years, even as the Main Board witnessed increasing growth.

According to SERC regulations, companies are required to have a minimum of $500,000 in operating capital to list, compared to $7.5 million on the main board.

Companies that list on the platform are also required to release one year of audited financial results, compared to the two years required for bigger companies.

Additionally, the results must show a positive net profit or positive operating cash flow with gross profit margin of at least 10 per cent.