[SINGAPORE] Software services firm 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 firm registered its prospectus earlier 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 live-streaming platform 17Live Group in November 2023.
It would be the second company to list on SGX 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, and media reports suggest Japan’s NTT Data Group may list a data centre Reit (real estate investment trust) on SGX by July.
When asked why Info-Tech Systems chose to list in Singapore, CEO 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”
He added that Singapore is naturally the right choice for the firm and a listing here will help it grow faster and provide a clearer advantage than listing anywhere else.
IPO details
For Info-Tech Systems’ proposed IPO, OCBC serves as the sole issue manager and global coordinator, with CGS International Securities Singapore joining as joint bookrunners and underwriters.
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The offering of 24,856,000 shares includes 19,856,000 shares allocated for selected investors outside the US and in Singapore, and the remaining 5,000,000 shares 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 approximately 19.7 per cent of the total offering.
Additionally, cornerstone investors – including Asdew Acquisitions, Avanda Investment Management, Dymon Asia Multi-Strategy Investment Master Fund, Ginko-AGT Global Growth Fund, Lion Global Investors, Maybank Asset Management Singapore, Nikko Asset Management Asia, Qilin Wealth Fund, and Splendid Asia Macro Fund – have entered into separate agreements with the company and Peter 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 approximately S$224.5 million.
The firm expects to raise net proceeds of around S$23.4 million from the offering and the issuance of cornerstone shares.
These funds will be used for research and development of new product lines and associated promotional activities, enhance sales and marketing activities for each of their existing markets and product lines as well as for expansion into new markets and capital to fund potential acquisitions.
The IPO will close at noon on Jul 2, with the listing and trading of Info-Tech’s shares expected to commence on a “ready” basis 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.
The firm offers user-friendly, accessible, and affordable software solutions strategically targeted at small and medium 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 of 31 December 2024 and no bank borrowings.
In FY2024, the firm’s 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 31 December 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 per cent and 11.9 per cent over the years 2025 to 2029, which bodes well for our group,” he added.
