[SINGAPORE] Software services provider Info-Tech Systems has launched its initial public offering (IPO) of 24,856,000 shares at S$0.87 each, in conjunction with its mainboard listing on the Singapore Exchange (SGX).
The company registered its prospectus on Friday (Jun 27), and its shares are expected to begin trading on Jul 4.
Info-Tech Systems is the first pure-play software-as-a-service (SaaS) provider for human resource management system (HRMS) and accounting software to list on SGX. Its listing will mark SGX’s first mainboard offering in almost two years, following the debut of livestreaming platform 17Live Group in November 2023.
It would also be the second company to list on SGX this year, after Vin’s Holdings went public on the Catalist board in April. Earlier this week, Lum Chang Creations filed a preliminary prospectus for a Catalist listing.
Japanese telco Nippon Telegraph and Telephone (NTT) is set to list a data centre real estate investment trust (Reit) on SGX, and lodged its prospectus with the Monetary Authority of Singapore on Friday.
When asked why Info-Tech Systems chose to list in Singapore, chief executive officer and co-founder Dilip Babu told The Business Times: “We are a Singapore-born company and the majority of our revenue comes from Singapore. (The country) is known for good standards, regulations and compliance, which gives us good branding in the local market as well as overseas markets.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
He added that the country is naturally the right choice for the company, and a listing here would help it grow faster and provide a clearer advantage than listing anywhere else.
IPO details
OCBC serves as the sole issue manager and global coordinator for the proposed IPO, with CGS International Securities Singapore joining as joint bookrunners and underwriters.
The offering of 24,856,000 shares includes 19,856,000 shares allocated for selected investors outside the US; the remaining 5,000,000 shares will be made available to the public in Singapore.
As part of the offering, Info-Tech Systems executive chairman Peter Lee has granted the joint bookrunners and underwriters an option to purchase up to 4,900,000 additional shares, representing about 19.7 per cent of the total offering.
Additionally, cornerstone investors – including Lion Global Investors, Maybank Asset Management Singapore and Nikko Asset Management Asia – have entered into separate agreements with the company and Lee to purchase a total of 41,144,000 shares. This includes 27,353,000 newly issued shares from the company and 13,791,000 shares sold by Lee at the offering price.
Cornerstone investors are large institutional investors that subscribe to an IPO offering before it is open to the public.
Following the offering, Info-Tech Systems will have a share capital of 258,000,000 shares, giving the company an estimated market capitalisation of about S$224.5 million.
The base deal size amounts to S$61.7 million, totalling 70.9 million shares, which includes an overallotment of 4.9 million shares.
Info-Tech Systems expects to raise net proceeds of about S$23.4 million from the offering and the issuance of cornerstone shares.
The funds will be used for the research and development of new product lines and associated promotional activities, and to enhance sales and marketing activities, among others.
The IPO will close at noon on Jul 2, with the listing and trading of Info-Tech Systems’ shares expected to commence at market open on Jul 4.
High profitability
Co-founded by Lee and Babu in 2007, Info-Tech Systems is headquartered in Singapore and has expanded into Malaysia, Hong Kong and India.
It offers user-friendly, accessible and affordable software solutions strategically targeted at small and medium-sized enterprises (SMEs).
With strong profitability over the past three financial years, Info-Tech Systems boasts a healthy balance sheet with net cash of S$29.7 million as at Dec 31, 2024, and no bank borrowings.
In FY2024, its revenue grew from S$30.8 million in FY2022 to S$43.7 million, achieving a compound annual growth rate (CAGR) of 19 per cent.
During the same period, profit after tax (PAT) rose from S$7.2 million to S$12.3 million, reflecting a CAGR of 31.1 per cent. This growth resulted in a PAT margin of 28.2 per cent in FY2024, up from 23.3 per cent in FY2022.
Although Info-Tech Systems currently does not have a fixed dividend policy, it intends to recommend and distribute dividends of no less than 50 per cent of its net PAT for the period from the listing date to Dec 31, 2025, and for FY2026.
Babu highlighted that the firm plans to grow further, offering a broader range of products as a one-stop digital solution for businesses.
“In each of our four markets, the market size of SME-focused cloud-based HR and accounting software are estimated to see a CAGR of between 7.2 and 11.9 per cent over the years 2025 to 2029, which bodes well for our group,” he added.
