Saliran Group Berhad’s IPO Oversubscribed 76 Times: A Testament to Investor Confidence in Industrial Supply Sector

1. IPO Details

Purpose of IPO: Saliran Group Berhad aims to raise RM21.71 million through its IPO, issuing 80.4 million new shares at RM0.27 per share. The funds are allocated as follows:​

Debt Repayment: RM7.0 million (32.25%)​
Working Capital: RM8.368 million (38.55%)​
Purchase of Machinery and Delivery Trucks: RM1.44 million (6.63%)​
Establishment of Sales Office in Indonesia: RM1.2 million (5.52%)​
Listing Expenses: RM3.7 million (17.05%)​

This allocation indicates a focus on growth and operational expansion, particularly in the Indonesian market. ​

The IPO was oversubscribed by 76.03 times, reflecting strong investor interest. ​
The company is issuing 80.4 million new shares, representing 21.0% of the enlarged issued share capital. ​
Post-IPO, the total number of shares will be 382.9 million, giving the company a market capitalization of approximately RM103.38 million at the IPO price. ​
Given the significant oversubscription rate, the IPO is likely to perform well on the first day of listing.​

Malacca Securities Sdn Bhd is acting as the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the IPO. ​

Company Overview

Business Model and Industry: Saliran Group Berhad is a supplier and distributor of pipes, fittings, flanges, and steel products, primarily serving the oil and gas industry. The company also manufactures customized fittings and flanges. In FY2023, Saliran held a 4.4% market share in Malaysia’s pipes, fittings, flanges, and steel products industry, with a revenue of RM243.2 million. ​

Financial Health: The company’s revenue grew from RM138.6 million in FY2022 to RM243.2 million in FY2023. Net profit increased from RM6.0 million to RM9.9 million during the same period. Projected revenues are RM326.7 million for FY2024 and RM345.6 million for FY2025, with net profits of RM13.7 million and RM14.9 million, respectively. ​

Market Position: Saliran serves diverse industries, with key revenue contributions from oil and gas (86.2%), building materials (3.9%), and palm oil refining (3.3%). The company plans to expand its storage capacity and establish a sales office in Indonesia to enhance its market presence. ​

Sector Trends: The pipes, fittings, flanges, and steel products industry in Malaysia is expected to grow, driven by the expansion of the oil and gas sector, increased demand in building materials and palm oil refining, and rising foreign direct investments. ​

The IPO application opened on February 18, 2025, and closed on February 28, 2025, with the listing date set for March 13, 2025. ​

The Malaysian economy is experiencing growth in key sectors relevant to Saliran’s business, suggesting a supportive environment for the company’s expansion plans.​

Saliran is unperturbed by US steel tariffs and is focusing on expanding into Southeast Asia, particularly Indonesia, to fuel growth. ​
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The strong oversubscription rate and positive industry trends indicate favorable market conditions for the IPO.​

Potential risks include market competition, reliance on the oil and gas sector, and operational challenges in new markets like Indonesia.​

Saliran plans to expand its storage capacity and establish a sales office in Indonesia within 42 months post-listing, aiming to tap into the country’s growing demand for pipes, fittings, and flanges. ​

Below is a comparison of Saliran Group Berhad with its industry peers based on key financial metrics:​

Company Listing Board Market Cap (RM million) P/E Ratio P/B Ratio Net Profit Margin (%) Revenue (FY2023, RM million) Net Profit (FY2023, RM million)

Below is a comparison of Saliran Group Berhad with its industry peers based on key financial metrics:​

​Note: Data for Unimech Group Berhad and Ban Hee Metal Sdn Bhd are limited due to their private status or unavailability.​

Several companies have launched IPOs around the same period as Saliran Group Berhad:​

The strong oversubscription rate of Saliran’s IPO indicates robust investor interest, suggesting a positive performance on the first day of listing.​

Analysts have noted Saliran’s strong market position and growth prospects.

Saliran’s IPO was oversubscribed by 76.03 times, indicating strong investor demand. This high level of interest suggests a likelihood of positive performance on the first day of listing.​

Considering the company’s solid financial performance, strategic growth plans, and the robust oversubscription rate, subscribing to Saliran’s IPO appears to be a favorable investment decision. While exact first-day trading prices are speculative, the substantial investor interest suggests that the stock may trade strongly above the IPO price on the first day.​

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