KUALA LUMPUR: Pantech Global Bhd (KL:PGLOBAL) saw its shares tumble 32% in its first trade on Monday after raising RM178 million from its initial public offering (IPO) on the Main Market of Bursa Malaysia.
The stock opened at 46.5 sen, significantly lower than its IPO price of 68 sen, before dipping further to a low of 40 sen. By 9:30 AM, Pantech Global was trading at 52.5 sen, with nearly 44 million shares changing hands.
The weak debut comes amid growing concerns among investors and the steel industry over US import tariffs on steel, which could lead to a surplus of products flooding Southeast Asia.
Despite the initial market reaction, Pantech Global remains optimistic. “We remain committed to strengthening our capabilities, expanding our market reach, and driving sustainable value for our stakeholders,” said Group Managing Director Adrian Tan during the company’s listing ceremony.
Strong Demand for IPO Despite Market Concerns
Pantech Global, a spin-off of Pantech Group Holdings Bhd (KL:PANTECH), saw strong demand during its IPO. Shares allocated to the public were oversubscribed nearly 45 times.
The company downplayed concerns over the US-imposed 25% tariffs on steel and aluminum imports, emphasizing that the blanket nature of these tariffs ensures a level playing field.
In 2023, Pantech Global controlled about two-thirds of Malaysia’s export market for butt weld pipe fittings and held a 16% share of the country’s stainless steel welded pipe production.
IPO Proceeds and Future Plans
The company has allocated 74% of its IPO proceeds for expansion and capital expenditure, 13% for working capital, and 8% for loan repayment, with the remaining funds covering listing expenses.
Notably, there was no sale of existing shares, meaning the company’s main shareholders retained their stakes.
Alliance Islamic Bank Bhd served as the principal adviser, underwriter, and placement agent for the IPO.
