DYNA-MAC shares yesterday rose five cents or 14 per cent in early trading on the Singapore Exchange from their initial public offer price of 35 cents.

 

The counter closed at 37.5 cents.

Dyna-Mac's IPO - backed by cornerstone investor Keppel Offshore & Marine - was subscribed about 1.1 times at the offering's close on Monday. The offer comprised 436 million shares and 30 million shares under an over-allotment option.

In total, 1,864 valid applications were received for the five million offer shares available to the public. The applications amounted to 57,805 million shares, with monies totalling about $20.2 million.

Keppel Offshore & Marine, through KS Investments Pte Ltd, had been allocated 250 million placement shares which accounted for 57.3 per cent of the invitation shares. This comes up to a 27.77 per cent stake in Dyna-Mac, for a total investment of $87.5 million.

Nelson Yeo, the managing director for Keppel Offshore & Marine's marine division, was appointed to Dyna-Mac's board as a non-executive director.

'Dyna-Mac's expertise and operations will complement Keppel's competencies and allow us to exert better control over the process of designing and fabricating oil and gas production modules,' said Mr Yeo.

Dyna-Mac's debut performance on the exchange was deemed 'pretty good' by CIMB's Jonathan Ng in a research note yesterday, given the weakness in the market.

'Dyna-Mac appears expensive on a historical valuation basis. Its latest order book outstanding stands at $138 million, substantially lower than its FY2010 revenues, according to disclosures from its prospectus,' the report said.

'Existing order book will be recognised as revenues in FY2011. Though it might be possible for Dyna-Mac to boost their outstanding order book on strong floating production storage and offloading (FPSO) demand, maybe it's time to take some profits off the table first, given the capriciousness of the stock markets in recent days.'