UPDATE 2-MR DIY opens books for Malaysia's largest IPO in three years

(Adds executive comment, more details)

KUALA LUMPUR/HONG KONG, Oct 6 (Reuters) - Malaysian home improvement retailer MR DIY Group opened the books for its 1.5 billion ringgit ($361.71 million) initial public offering (IPO) on Tuesday, the country’s largest listing in three years.

The company fixed the offer price at 1.60 ringgit per share, giving it an estimated market capitalisation of 10 billion ringgit. The bookbuild period will last seven working days, before pricing on Oct. 14 and listing on Oct. 26.

MR DIY joins a number of other Southeast Asian companies planning IPOs this year, including Thailand’s Siam Cement Group Packaging and Philippines’ Converge ICT Solutions Inc, a trend that signals an uptick in fundraising activity in underperforming markets.

The MR DIY listing is on track to be the largest in Malaysia since Lotte Chemical Titan raised 3.77 billion ringgit in July 2017.

Offering up to 941.5 million shares, representing around 15% of its enlarged issued share capital, MR DIY said it planned to use the IPO proceeds primarily to repay bank borrowings.

Its prospectus showed more than a dozen cornerstone investors including funds under BlackRock Inc, Matthews, Aberdeen Standard Investments and Fidelity Investments as well as JPMorgan Asset Management, AIA Bhd and Affin Hwang Asset Management.

MR DIY, which has around 29% market share in Malaysia and 674 stores in its home market and Brunei, had originally planned to list in the second quarter of the year but delayed amid concerns about rising coronavirus case numbers.

Revenue grew 12% in May and June after a partial lockdown in Malaysia was eased, Chief Executive Officer Adrian Ong said.

“Reviewing the performance of our business, the resilience of our business, the continued growth, it clearly made sense for us to come back to the market,” Ong said in a virtual press briefing.

MR DIY plans to add 307 stores in the next two years, estimating the home improvement retail sector will grow at 10.2% compound annual growth rate in the next four years.

The value of Southeast Asian IPOs so far this year is $4.6 billion, up from $3.1 billion a year ago, Refinitiv data shows, mainly due to $3 billion raised by Thailand’s Central Retail in February. ($1 = 4.1470 ringgit) (Reporting by Liz Lee in Kuala Lumpur; Additional reporting by Sumeet Chatterjee in Hong Kong; Editing by Kim Coghill and Jane Wardell)