Plastics company, Omni, is expected to list on the Junior Market of the Jamaica Stock Exchange any day now.  So is it a good investment?

So, the first IPO of 2024 has officially come and gone. The IPO was oversubscribed and closed early on May 22.

It was a very small offer.  500 million shares were up for grabs.  And only 120 million of that was available to the public. The rest was reserved for employees, key partners and the lead broker, NCB Capital Markets.

The offer took three days to close, which is a tad long for such a small offer, but I did see a couple of complaints about issues with NCB’s GOIPO platform, so that probably played a role. In any case, an oversubscribed IPO in this climate is still a win.

If you applied in the general pool, you’ll get the first 10 thousand shares you applied for plus 25% of the remainder. 

That’s not bad, especially since we’re coming from the days of 2% allotments.

Omni employees will get 98% of what they applied for, while key partners will get 87%. The leader broker, NCB Cap will be allotted 100%.

So overall, it’s a good run for a company that was relatively unknown until this IPO.

And the fact that no one except NCB got all the shares they wanted, means there’s still demand out there for these shares.

And high demand usually means the price will go up.

Omni Industries has been around for a while. It’s a manufacturing and distribution company that specialises in thermoplastics. You’re probably thinking, ‘I’ve never seen a thermoplastic in my life’ but chances are you probably have a couple of their products in your house right now. 

Things like plastic buckets, basins, garbage bins and garden hoses. The company is also Jamaica’s largest manufacturer of packaging products, like food containers and crates.

On top of that, according to Managing Director Patrick Kumst, OMNI controls around 40% of the market share for water distribution products, like PVC pipes. 

The National Water Commission is actually one of their biggest clients.

With such a large market share and big-name clientele, it’s easy to see why investors would be interested in this company.

In its prospectus, the company said it plans to use the funds from the IPO to upgrade and purchase new equipment and have additional working capital. Now that the offer is closed and the allotment is out, the company will list on the Junior Market any day.

Remember, this is not intended as investment advice.  Please consult your licensed financial advisor before making any investment decisions.

And that’s the bottom line.