FDH Bank Initial Public Offer (IPO) which closed on July 17, has received positive response from investors, with a 2.1 percent oversubscription ahead of listing on the Malawi Stock Exchange (MSE) on August 3.
Through the IPO, FDH Bank has raised K13.8 billion.
While 1.38 billion shares were on offer, the number of shares applied for reached 1.41 billion at a value of K14.1 billion. This represents 2.1 percent oversubscription rate, which is equivalent to K329 million, a statement of IPO results shows.
FDH Bank managing director Elias Ngalande said the refunds in relation to the IPO were paid by yesterday through respective bank accounts.
He said FDH Bank shareholders were sent letters yesterday confirming the shares allotted and registered in their respective names at the central securities depository.
Ngalande, however, indicated that government, which initially held 5.04 percent stake in the bank,
has opted to retain its shareholding.
He said as a result of this, FDH Financial Holdings Limited, the parent company of FDH Bank, increased the number of its shares offered for sale to comply with the minimum listing requirements by MSE.
Ministry of Finance spokesperson Williams Banda said government has retained its shares for “both strategic and economic reasons to supplement its revenue through dividend”.
This means that post-IPO, FDH Financial Holdings Limited holds 74.05 percent, Malwi Government 4.75 percent, MSB Employee Share Ownership Scheme 1.2 percent and the public has 20 percent stake.
Of the amount held by the public, 2 807 comprise retail investors while 41 are institutional investors, including preference shareholders.
In a brief e-mail response yesterday, Ngalande thanked all parties to the transaction, including FDH Bank shareholders and the investing public, for supporting the IPO.
“We believe that the apparent high interest portrayed by investors in acquiring the bank’s shares coupled with the large number of shareholders in the bank post-IPO, we will help to create a healthy and active secondary market on the company’s shares that should enable the shareholders to realise value from their investment,” he said.
Earlier this month, Nico Asset Managers Limited, Cedar Capital Limited, Continental Asset Management and Alliance Stockbrokers Limited in their analyses of the IPO indicated that FDH Bank is a long-term buy that offers good value for investors.
The firms highlighted, among other factors, that FDH Bank has one of the best dividend policies on the market that seek to pay up to 80 percent of its profit as dividends.
Besides seeking to raise capital at a cheaper cost through listing and support the future growth of the bank, FDH Bank offered its shares to the public and initiated the intention to list the MSE to fulfill a contractual obligation with the Malawi Government as part of FDH Financial Holdings Limited’s acquisition of the then government wholly-owned Malawi Savings Bank (MSB).
FDH Bank is expected to be fifth bank to be listed on the 15-counter market.