Brahmal takes up stake in Instacom

by **Cals** Mon 21 Dec 2015, 00:03

Saturday, 19 December 2015

Brahmal takes up stake in Instacom

BY IZWAN IDRIS

Creador chief buys 2% in construction outfit on personal capacity
PETALING JAYA: Brahmal Vasudevan (pic), the founder and chief executive officer (CEO) of private equity firm Creador Sdn Bhd, has emerged as one of the investors who took up shares in Instacom Group Bhd via a private placement.
He acquired the 2% stake in the construction company on his own personal capacity.
Based on the placement price of 25 sen each, Brahmal would have paid about RM10mil for his portion of shares.

Shares in Instacom was last traded at 27.5 sen yesterday, giving it a market value of RM643mil. It was the most actively traded counter yesterday with 90.37 million shares transacted.
It was believed that Brahmal acquired the shares in his own personal capacity because the investment amount involved was too small for Creador to consider.
Brahmal has become as one of the most prolific investors having purchased shares in a number of relatively small, but fast growing and exciting companies.
Previous reports had named him as a shareholder in Mulpha Land Bhd, SMRT Holdings Bhd, Scicom (MSC) Bhd, MyEG Services Bhd and GHL Systems Bhd.
Meanwhile, the fund he manages has taken stakes in companies such as IFCA MSC Bhd, Oldtown Bhd, Asiamet Education Group Bhd and Bonia Corp Bhd. It also has investments in Indonesia and India, two of the most attractive markets in Asia because of its large domestic market.
“Creador largely goes into companies with strong consumer business. When it is too small for the fund, sometimes Brahmal takes a position in his personal capacity,” said an investment banker familiar with the group.
Brahmal’s interest in Instacom could be driven by the company’s exciting growth prospects.
CIMB Research in recent reports named Instacom as a proxy play to the growing tide of foreign direct investment from China.
The firm has a target price of 67 sen for the stock, based on its break-up value.
Instacom’s private placement exercise would raise RM58.5mil in fresh capital for the group, which it can quickly utilise to take advantage of new orders from China Railway Construction Corp Ltd (CRCC).
It has recently proposed to change its name to Vivocom International Holdings Bhd, to reflect its transformation to a full-fledge construction company.
Vivocom is the inhouse contractor for the global Chinese construction giant. It had bagged contracts totalling more than RM350mil from CRCC Malaysia Bhd in recent months.
“We have imputed contract wins of RM3bil in 2016 into our earnings forecasts. A contract award of RM2bil-RM3bil by CRCC would meet our order book win estimate,” CIMB Research said in a note dated Dec 6.
The Government, earlier this month, has awarded the Gemas-Johor Baru electrified double tracking project to CRCC. The project is worth an estimated RM8bil.