Vietnamese feed and farming company Nova Consumer has announced its initial public offering (IPO) of 10.9 million shares, with an eye to using the proceeds to boost future growth and business diversification.

The IPO is equivalent to 10% of the company’s registered capital of 1.09 trillion dong (around US$47.8 million), with a minimum share price expected at 43,462 dong (about US$1.9). The minimum application for an investor is 1,000 shares, and the maximum, 5.44 million.

The application period goes from February 7 to 28, and the company will announce the allotment result on March 4. At the mentioned minimum price, the firm’s pre-IPO value is more than 4.7 trillion dong, more than four times higher than the registered capital, while the post-IPO value is expected to be 5.2 trillion dong.

Nova Consumer plans to use 430 billion dong from the IPO to buy back the contributed capital of Consumption Investment JSC in Sunrise Foods Company and invest another 35 billion dong in Sunrise Foods to help it develop products.

Nova Consumer, formerly Anova Corporation founded in 1992, engages in farming and manufacture of feed and medicine for farm animals. It is part of Novaland Group, a Vietnamese major conglomerate with an ecosystem in the real estate, trade and service, agriculture and consumer sectors. Novaland is one of the 30 largest listed companies by market cap on the Vietnamese stock exchange.

DEG, the investment arm of German state-owned development bank KFW – which this January provided a US$17.5 million long-term secured loan for Nova Consumer – says the company has established itself as a reputable local player in a heavily commoditized and cyclical market segment led by international producers.

The DEG loan helped Nova Consumer strengthen its balance sheet by allowing it to refinance the internal cash used for the redemption of convertible bonds held by the World Bank’s investment arm IFC that matured in June 2021, and enabled the Vietnamese company to finance or refinance maintenance capital expenditure for its animal feed, health or farm segments.

Nova Consumer has 11 subsidiaries and three affiliated companies operating in the farming industry, including several in the animal vaccine and healthcare sectors, and in veterinary medicine using technologies up to WHO-GMP standards.

The Vietnamese firm currently employs 1,400 employees and, according to DEG, expects to create 1,000 new jobs in the next five years by developing a large-scale and integrated food chain, for which DEG and the company are currently discussing business support system programmes.