iFAST is planning to raise $31,160,000 from issuing new shares at 95 cents each:
- 2.8 million of public offer ($2,660,000)
- 30 million of placement shares ($28,500,000)
The retail portion for the public to subscribe is mere 8.5% of the total new shares. This is too small an issue for small time players when trading in the Singapore Exchange. One risk factor (as indicated in the prospectus) was no active trading market of the shares.
To get into this IPO, investors should read its prospectus which is 540 pages. There is a portion in the prospectus that covers Risk Factors which is 12 pages long. Read it to get an idea of the operational risks and financial risks involved in the corporation.
The Group Net Asset Value (NAV) was 24.74 cents at 30 September 2014 (adjusted after offering shares and cornerstone shares). IPO investors are paying 95 cents per new share giving it 3.8 times the NAV. Price of 95 cents is not indicative of trading market.
Profit after tax for 2013 was $5.09 million.
Profit for 9 months of 2014 was $7.57 million (full year profit will change after full year staff costs, operating and other operating costs are considered).
Price Earnings ratio (historical) for 2013 was 22.9 times. There is no comparison with similar outfits like iFAST.
Directors had indicated publicly that they intend to distribute 60% of net profit after tax (excluding exceptional items) for the fourth quarter 2014 and 2015.
Potential for growth of the business was made against historical performances of investment products distribution and adminstration platform businesses in UK and Australia. iFAST’s Asset under Administration (AUA) grew at compounded annual growth rate of 26.8% over 10 years till September 2014.
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