FARM Fresh Bhd has set the price of its public issue at RM1.35 per share and see the company raise RM1 billion.

The IPO involves an offer for sale of up to 520.2 million existing shares and a public issue of 223 million new shares.

The Main Market listing will make Farm Fresh the largest IPO since June 2021.

The company is rapidly growing its dairy market share and product offerings with plans to further expand its capabilities across the value chain distribution network while increasing its regional presence outside Malaysia.

Farm Fresh will utilise RM301 million raised from the listing for its expansion plans which include establishing a new manufacturing hub, dairy farm and integrated processing facility in Malaysia.

It also plans to expand a production facility in Australia, expand regionally and raise funds for working capital, as well as explore opportunities in the Hong Kong market in the future.

Farm Fresh group MD and CEO Loi Tuan Ee said the regional expansion approach will be different from what it did in Malaysia.

“In Malaysia, we have our own land and farm processing, but for other countries the focus is more toward expanding the processing plant, our brand of dairy products,” he said in a press conference yesterday.

Farm Fresh has proposed to payout 25% of earnings as dividends.

Farm Fresh currently is the secondlargest player in the ready-to-drink (RTD) milk category (which includes the chilled RTD milk and ambient RTD milk segments) in the first nine months of 2021, commanding an 18% market share.

Pic by Muhd Amin Naharul

It is an industry leader in chilled RTD milk with a 42% market share and the third-largest player in the yogurt category with an 11% share of the Malaysian market.

Loi ascribed the company’s success to its house dealer network, which consists of micro-entrepreneurs that help the company achieve better product penetration by distributing fresh milk products in response to customer demand.

To date, the IPO, managed by CIMB Investment Bank Bhd, has secured support from a record number of 30 cornerstone investors. Khazanah Nasional Bhd has a stake in Farm Fresh.

Applications for the public issue portion are open from yesterday and will close on March 8, 2022.

The company is scheduled to be listed on the Main Market on March 22, 2022.

Upon listing, Farm Fresh will have a market capitalisation of RM2.5 billion based on the initial retail price of RM1.35 and its enlarged share capital of 1,857.9 million shares.