The initial public offering (IPO) of Honey Bun shares was oversubscribed within one minute on Wednesday, receiving applications in excess of J$200 million or about four times the offer, according to lead broker and financial adviser Mayberry Investment Limited.
The IPO, targeted to raise J$50.79 million, was initially scheduled to stay open for a week. The eager take-up of the pastry shares aligns with the pattern for other junior market IPOs at debut.
Honey Bun Limited was established some 28 years ago by Herbert and Michelle Chong.
A limited liability company, it makes and wholesales a range of pastries and cakes, including donuts, snack cakes, buns, raisin bread, cinnamon rolls and cheese bread for the local and export markets.
Its portfolio has more than 20 products that are sold under the Honey Bun brand.
Prior to the close of the offer, analysts gave mixed recommendation on the stock’s future potential, but were in agreement on the company’s growth potential.
Proceeds from the IPO will finance product development and investment in software and equipment.
A total of 18.75 million shares were on offer, but only 9.375 million units priced at J$3 were made available to the public.
Of the remaining, 8.6375 million shares were reserved for employees of the company at discounted prices of J$2.40 and J$1, while 737,500 was set aside for key partners at J$3 per share.
The company is expected to list on the JSE Junior Exchange within the next three to four weeks.