Cambodia Investment Review

Cellcard Raises $5.3M IPO on Cambodia’s Stock Market

Cellcard Raises $5.3M IPO on Cambodia’s Stock Market

Harrison White

In a significant stride for Cambodia Securities Exchange (CSX), CAMGSM (Cellcard) under the Royal Group of Companies, has officially announced raising a record KHR 22 billion (approx. $5.3 million) after its month long initial public offering (IPO) roadshow. The stock when launched by end of June will be the one of the largest IPOs in the history of Cambodia, setting the stage for an exciting phase in the nation’s financial growth.

Seng Chan Thoeun, CEO of Royal Group Securities Plc.

Cellcard, the longest-serving, most awarded and only Khmer-owned telecommunications company in Cambodia, has been instrumental in the development of the telecommunications sector in the country for over 25 years. Its entry onto the local bourse will boost the Cambodian stock market’s cap by nearly 30%. With Cellcard’s total valuation of $1.1 billion, this development is expected to provide substantial momentum to Cambodia’s securities market.

Cellcard IPO was designed with a strategic purpose

“The listing of CAMGSM Plc on the securities market signifies the advantageous role of the Cambodia Securities Exchange in raising capital and channeling profits to Cambodian investors,” remarked Seng Chan Thoeun, CEO of Royal Group Securities Plc. “Moreover, it demonstrates the dedication and commitment of the management of Royal Group of Companies to bolster the development of Cambodia’s securities market.”

Read more: Cellcard describes IPO as ‘biggest opportunity for investors in Cambodia’

Cellcard’s IPO was designed with a strategic purpose – to garner funds for expanding its network and services and to offset some of its existing debt. The company offered each share at KHR 2,270, equivalent to USD 0.57, making it a valued opportunity for investors to secure a share of one of Cambodia’s prime businesses.

Cellcard senior management at the 2023 IPO launch hosted at Cambodia Securities Exchange in Phnom Penh.

One of the noteworthy features of Cellcard’s IPO was its guaranteed dividend yield. The company has promised its customers a 7% dividend yield annually for five years, providing a consistent return for investors.

Commenting on the IPO listing, retail investor and co-founder of Rising Giants Podcast Max Thornton highlighted that this was a pivotal move for the emerging securities market in Cambodia. “Telecom and bank IPOs often serve as an initial catalyst that triggers further retail investor momentum in local stock markets across many emerging markets, since these are businesses that resonate with everyday investors. It’s encouraging to see Cambodia following this proven trajectory,” they said.

Raising capital a challenge in current market conditions

Kim Sophanita, Director of CSX, explained to Cambodia Investment Review, “Raising equity capital is challenging in the current uncertain world economy, and with two big IPOs happening concurrently. However, Cellcard’s successful fundraising, which surpasses some previous IPOs, is a commendable start. I am confident that this IPO will pave the way for the company to execute more POs in the future.”

Kim Sophanita, Director at Cambodia Securities Exchange.

In addition to Cellcard’s IPO, the Royal Group has disclosed plans to issue bonds amounting to $130 million—$70 million for Cellcard and $60 million for EZECOM. This will provide an avenue for public investors to contribute to the development of the technical infrastructure in the country.

Read more: Cambodia Stock Exchange Faces Slowdown in Q1 2023

While the CSX saw a downturn in Q1 2023, with a drop in total trading value and volume, the exchange remains optimistic about the future. It has set ambitious growth targets for 2023, including doubling daily trading volumes, tripling the number of registered trading accounts, and listing 14 new firms on the exchange. These targets align with the broader mission of the CSX to raise public awareness and stimulate investment opportunities in Cambodia’s evolving capital markets.

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