Kuala Lumpur: Maxis, Malaysia`s top mobile operator, is tipped to receive a warm welcome back to the bourse this month in an IPO worth around USD 3.43 billion, billed as the biggest in Southeast Asian history.
Maxis Berhad, controlled by reclusive Malaysian tycoon Ananda Krishnan and Saudi Telecom, is launching the initial public offering (IPO) on Bursa Malaysia two years after it was taken private and de-listed.
It is offering 2.25 billion, or 30 percent, of its shares at an indicative price of 5.20 ringgit (USD 1.52) which would raise 11.7 billion ringgit. Most of the shares will go to institutional investors.
Parent company Maxis Communications is expected to deploy the proceeds of the sale, slated for November 19, on funding expansion in the booming Indian and Indonesian markets, and to reduce debt.
Economic pundits are upbeat about the listing despite the uncertain global economic outlook that has soured other recent share offerings in the region, but warn that the market remained unpredictable.
Yeah Kim Leng, chief economist with ratings agency RAM Holdings, said that Maxis` dominant position in the domestic telecoms industry had triggered an early rush to collect application forms.
"Investors can smile. The listing is likely to be successful," he told reporters, but said there were unlikely to be any hefty immediate profits.
"The market is very volatile. It is not a sure bet. But the sentiment is strong for Maxis," he said.
The listing includes only Maxis` Malaysian mobile business and excludes its ventures in India and Indonesia which remain under Maxis Communications, the unlisted parent company.
Alliance Research said Maxis remains the leading mobile operator in Malaysia in both the prepaid and postpaid segments with some 11.4 million subscriptions as at end of the first half of 2009.
Its postpaid segment commands a thumping 46.4 percent of the local market share, but Alliance said the business had "limited growth prospects, without overseas operations".
"The new listed entity will be without its overseas operations which could offer robust growth potential going forward. Investors are left with domestic operations, in which mobile business faces limited growth," it said.
Nazir Razak, group chief executive of CIMB which is the principal adviser for the listing exercise, has said the IPO will be the biggest in Southeast Asian history.
He has defended the company`s growth prospects, saying there is still plenty of potential for the group`s broadband and data segments in Malaysia and that SIM card penetration is also predicted to grow.
Ananda Krishnan owns a 45 percent stake in Maxis Communications, while Saudi Telecom owns 25 percent and the remainder is held by local funds.
Apart from Maxis, Ananda -- ranked by Forbes magazine as Malaysia`s second-richest man -- has interests in the country`s pay TV operator Astro, gaming and power firm Tanjong and satellite services company Measat.