CTOS Digital attracts record number of cornerstone investors

Article was originally published by Focus Malaysia

MAIN Market-bound CTOS Digital Bhd’s has attracted the largest number of institutional investors participating in a Malaysian initial public offering (IPO).

A total of 23 cornerstone investors participated in the institutional offering of the IPO, including renowned names such as the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB), Aberdeen Standard Investment, AIA, Eastspring Investments, FIL Investment Management and JP Morgan Asset Management.

CTOS Digital is the holding company of CTOS Data Systems Sdn Bhd and has an associate stake in Business Online Public Company Ltd in Thailand – making the group ASEAN’s leading credit reporting bureau.

“CTOS Digital’s growth story, combined with an innovative, comprehensive product offering has proven to be a compelling one,” commented group CEO Dennis Martin at the company’s prospectus launch.

“CTOS Digital’s product offerings have expanded beyond credit reporting instruments to include a breadth of digital solutions to support every stage of the customer lifecycle. All of this comes on the back of steady financial growth, making us the leading credit reporting agency in Malaysia.”

Independent market research carried out by IDC Malaysia reported that countries in the ASEAN region had a cumulative credit reporting market size of RM990.5 mil in 2020 which is expected to grow at a compounded annual growth rate (CAGR) of 10.8% between 2021 and 2025 or relatively higher than the forecasted 7.5% and 5.3% CAGR in the US and UK.

Strikingly, the Malaysia’s credit reporting market size is slated to expand at a CAGR of 13.2%, a much faster pace compared to the ASEAN, US and UK markets.

“To cater to the robust environment in Malaysia, we have steadily introduced new products each year, including CTOS eKYC, CTOS Consumer and SME Score, CTOS ID-Guard, the Malaysian banking industry’s first fraud bureau, and many more,” Martin pointed out.

“This is in line with our plan to introduce more digital solutions to ultimately build a dynamic, stable and agile financial ecosystem in Malaysia.”

As a further testament to the group’s growth, CTOS Digital recorded RM42.3 mil revenue in its 1Q FY2021 ended March 31 or 24.1% higher than the RM34.1 mil in the previous corresponding quarter while its normalised PATAMI (profit after tax and minority interests) for the quarter under review grew 73% to RM16.4 mil from RM9.5 mil previously.

CTOS’ IPO exercise entails the public issue of 200 million new shares and an offer-for-sale allocation of 900 million existing shares which are priced at RM1.10/share.

Out of the RM220.0 mil IPO proceeds, RM155.2 mil will be used for the repayment of all bank borrowings to free up debt headroom, while RM59 mil will be earmarked for synergistic investment and acquisition of target companies. The remaining RM6.1 mil will be utilised to defray listing fees and expenses.

Applications for CTOS Digital’s IPO opens today (June 30) and close on July 6 July. CTOS Digital is expected to list on the Main Market of Bursa Malaysia on July 19. – June 30, 2021