There is only one upcoming IPO (initial public offerings) in the week of June 24 to June 28, based on TipRanks IPO Calendar. This could be due to Independence Day on July 4. An IPO refers to the public market debut of a private company. Following the IPO, the company’s shares become available for trade (sale/buy) on the stock exchange.
There are several merits and demerits for a company going public. The merits include gaining the ability to raise capital, greater liquidity, and improved brand recognition. On the other hand, a publicly traded company faces stringent financial reporting norms, is constantly in the public eye and answerable to shareholders, and experiences high costs related to maintaining compliance with regulatory requirements.
The IPO market is displaying greater traction this year, with challenges such as elevated inflation and interest rates showing signs of moderation. With this background in mind, let’s look at the upcoming IPO for this week.
Majestic Ideal Holdings Ltd.
Incorporated in the Cayman Islands, Majestic Ideal Holdings Ltd. operates as a holding company. Its primary operations are hosted in Shanghai under the name New Brand. The company offers supply chain management (SCM) services to the Chinese apparel industry, specifically for yarn products, textiles, and finished garments. The company boasts itself as a one-stop solution for SCM services, including market trend analysis, product design and development, raw material sourcing, production and quality control, and logistics management.
Majestic Ideal Holdings Ltd. is expected to list its ordinary shares on the Nasdaq Capital Market exchange on July 2, under the ticker symbol “MJID.” The company is set to issue 2.5 million ordinary shares at a price band of $4 to $5 apiece. The fresh issue of shares represents 12.2% of the company’s outstanding shares.
Majestic Ideal Holdings expects to raise $9.5 million in net proceeds from the offering, considering the midpoint of the price band. The company will use 20% of the proceeds to buy raw materials, 20% for marketing expenses and international expansion, 20% to bolster its SCM service capabilities, 10% to develop eco-friendly and sustainable raw materials, and the rest 30% toward general working capital expenses.
Furthermore, the company’s Selling Shareholders are offering to sell 1.25 million shares pursuant to the Resale Prospectus. The company will not get any proceeds from the sale of shares by the selling shareholders. Following the closing of both the offerings, the controlling shareholders will own 64.9% of the company, down from more than 92% held at the time of filing of the prospectus.
