Brokerage house SBI Royal Securities has received in-principal approval from Cambodia Securities Exchange (CSX) to be the Liquidity Provider (LP) for the common stocks for the mechanical, electrical, and plumbing engineering firm DBD Engineering Plc after its IPO next month.
Seng Chan Thoeun, Chief Executive Officer at SBI Royal Securities, told Cambodia Investment Review that his firm will provide liquidity to the stock trading in the secondary market. Adding, it will make the stock more liquid and helpful for investors to exit.
“It is good that each underwriter could consider playing this role for its own IPOs given the current status of our market. Our market is dominated by retail investors so our liquidity role is very crucial to encourage more retailers,” Thoeun said.
A liquidity provider is an individual or institution who or which acts as a market-maker in a given asset class. This means that the liquidity provider will act as the both the buyer and seller of a particular asset, thus making a market.
SBI Royal Securities is currently working with DBD Engineering in the ‘book-building phase and aims to raise between $3 – $3.8 million for its Initial Public Offering (IPO) on the CSX Growth Board.
The subscription period runs from the 26th of July to 18th of August and is being sold at KHR 2,380 a share with a 5.5% minimum guaranteed dividend for the first three years.
It will be the first company to list on the board designed for SMEs to raise capital since its launch in 2015.
The company said it intends to use 30% of the IPO proceeds to fund its construction business, allocate 20% for additional working capital, 10% to the purchase and upgrade of equipment and use the remaining 40 percent for other general corporate purposes.
DBD reported total revenue of $12.53 million last year and is forecast to generate $12.71 million in 2021. The company has 700 employees and has been involved in the construction of Aeon Malls 1 and Two, as well as the Chip Mong Shopping mall and Calmette Hospital, among other projects.