Primega Group Holdings Limited (PGHL) of Hong Kong priced its small-cap IPO at $4.00 – the low end of its $4.00-to-$6.00 range – and sold 1.5 million shares to raise $6 million early Monday, July 22, 2024. Primega’s shares started trading at $5.60 – up $1.60 for a 40 percent gain from their $4.00 IPO price – in their NASDAQ debut at 10:20 a.m. EDT on Tuesday – on volume of 94,427 shares, according to NASDAQ. Primega’s stock slid to a session low of $3.67 at about 11:10 a.m. EDT and then regained its footing to climb back into the back. At 11:55 a.m. EDT, Primega’s stock hit $5.33 on NASDAQ; volume for the day so far stood at about 736,015 shares, according to NASDAQ. (This column, published Monday, was updated Tuesday morning with news on Primega’s NASDAQ debut.)
Primega’s stock closed at $4.22 – up 22 cents for a 5.5 percent gain for the day – in its first day of NASDAQ trading. During the session, Primega scored a moonshot – more than doubling its IPO price to hit a session high at $9.55 in its first day of trading. Volume for the day was about 3.4 million shares.
Bancroft Capital, majority owned by disabled veterans, was the sole book-runner for Primega Group’s IPO.
Primega Group says in the prospectus that its Hong Kong subsidiary, Primega Construction, provides these services as a subcontractor to other construction contractors: transport soil and rock from construction sites; diesel oil trading, and construction work, including excavation and lateral support (ELS) work and bored piling.
“Primega Construction works with recyclers and other private contractors to repurpose and recycle excavated materials, reducing the volume of construction waste ending up in landfills, while lowering waste disposal fees incurred by its customers,” the prospectus says.
The company said that it intends to use the net proceeds from the IPO for expanding the existing business by acquiring additional machinery and equipment, including tipper trucks and excavation machines and employing additional staff, as well as for upgrading the information technology systems to track the location and deployment of the trucks to improve resource allocation and efficiency. Some of the IPO proceeds will also be used for working capital and other general corporate purposes.
Primega Group is profitable. For the 12 months that ended Sept. 30, 2023, Primega Group reported net income of $0.88 million on revenue of $9.54 million, according to financial statements in the prospectus.
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