By Yantoultra Ngui and Prak Chan Thul
Cambodia's nascent stock market is set to double its number of listed companies next week when Taiwan garment company Grand Twins International becomes the second firm to go public in the Southeast Asian nation.
Grand Twins, one of the largest clothing manufacturers operating in Cambodia and which counts Adidas and Reebok among its clients, is scheduled to make its market debut on May 29 after a $19.3 million IPO.
It will be the first listing since April 2012, when state-backed Phnom Penh Water Supply Authority made its debut. The Cambodia Securities Exchange opened for business in 2011.
Grand Twins's listing comes amid strikes and sometimes violent protests in Cambodia's garment industry as workers call for higher wages and better safety standards.
The industry, which garners more than $5 billion in annual revenue and employs 600,000 people, is key to Cambodia's fast-growing economy and has attracted foreign investment as manufacturers seek cheaper alternatives to China.
"We are a garment maker, and the textile industry is an anchor of the Cambodia's economy, so I think we will fare well in Cambodia rather than places like Taiwan. Taiwan is more for electronics companies going for listing," a company official based in Taiwan told Reuters over the phone on Thursday.
A successful debut could boost the outlook for other listings this year, when up to three companies are expected to go public, according to a Phnom Penh-based financial source close to the deal.
"Although the response is not as hot as the first IPO, the book-building is a success. They are oversubscribed," the financial source told Reuters on Wednesday.
Seeking funds for working capital and to expand a factory, Grand Twins sold 8 million new shares, or 20 percent of the company, at $2.41 per share, slightly below the middle of its indicative range of $1.85 to $3.50, according to the website of the deal's sole underwriter, Phnom Penh Securities.
A lower offer price would entice more investors to buy during the listing, the source added, declining to be identified as he is not authorised to speak to the media.
Grand Twins International, which employs about 5,600 workers, made a $8.79 million net profit in 2012 on $54.9 million in revenue, according to its financial statements.