Business

$0.90 for a HRnetGroup share

First recruitment agency to seek a listing on Singapore Exchange prices its initial public offering

Singapore's largest recruitment agency has priced its initial public offering (IPO) at 90 cents a share, at the top end of its indicated price range.

HRnetGroup, the first recruitment agency to seek a listing on the Singapore Exchange, expects to raise net proceeds of $165.8 million and achieve a post-IPO market cap of about $910 million.

The firm operates two main businesses in professional recruitment and flexible staffing, deriving 75 per cent of revenue from flexible staffing.

It pulled in $365 million in revenue last year and a net profit of $41 million.

Its executive director Adeline Sim said: "Since inception, we have self-funded our organic growth through our strong cashflow generation, without the need for any debt financing."

Analyst Sumeet Singh said: "The company has paid out $159 million worth of dividends to shareholders over 2014 to last year and still remains in net cash, which seems to imply that the IPO is more about providing liquidity to employees rather than raising cash to acquire new businesses, as is being indicated."

Last year, HRnetGroup also received a $11.4 million lift in the form of government grants and subsidies, though these are being cut down this year, he added.

The HRnetGroup IPO is the second on the mainboard this year, after Dasin Retail Trust's listing in January. But momentum has picked up, and bigger listings are coming soon.

Singtel's planned IPO of its fibre broadband unit, NetLink Trust, is expected to take place closer to July.

This could raise at least $2 billion, making it the biggest listing here since Hutchison Port Holdings Trust, which raised US$5.5 billion (S$7.6 billion) in 2011.

Australia's Cromwell Property Group is reportedly planning to list a billion-dollar European property portfolio in Singapore this year.

There has also been more IPO action among smaller companies, with five IPOs on the Catalist board this year.

Catalist-listed environmental engineering company Sanli Environmental made a solid debut yesterday, opening at 40 cents and closing at 37.5 cents, a gain of 15 cents, or 67 per cent, from its offer price of 22.5 cents.

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