Atlantic Hardware & Plumbing Company Limited successfully listed on the Jamaica Stock Exchange (JSE) Junior Market last Friday but dipped below its $1 listing price amid a wave of fading investor enthusiasm on its first day of trading.

The wholesale distributor of construction and home improvement supplies listed under the ticker/symbol AHPC at a $2.45-billion valuation after raising $200 million in fresh equity from an initial public offering (IPO) that was capitalised at $500 million. As a result of Atlantic’s listing, the number of companies currently on the Junior Market rose to 48, bringing to 104 the total number of companies on the JSE. Atlantic’s listing also increased the number of listed securities to 152.

“We are truly humbled by the tremendous support we received for Atlantic’s IPO. The response was overwhelming. Our IPO was oversubscribed with thousands of applicants. To all the investors who placed their trust in us, thank you. We recognise the confidence you have in our vision, and we are excited to have you as partners in the next phase of our growth,” stated Atlantic Chief Executive Officer Deanall Barnes, in his listing ceremony speech.

While there was fanfare at JSE headquarters over another successful listing, investors rushed to sell their shares in the 30-year-old company. Atlantic’s stock opened at 9:00 am with 11 buy orders and 11 sell orders which saw it trade up to $1.10. However, as the hour passed by, more investors continued to sell their shares as they observed that investors weren’t interested in bidding above $1 for the ordinary shares.

The continued selling pressure resulted in the company halting down at 10:03 am after the stock traded at $0.83. Stocks on the JSE are halted for an hour where no trading takes place once the stock trades 15 per cent above or below the company’s reference price. There were 32 trades at this point in time with 1,024,225 shares changing hands worth $913,844.66.

By the time trading ended at 2:00 pm, 1,902,934 shares changed hands over 58 trades valued at $1,756,331.42. The stock closed at $0.92 with a best bid of $0.93 and a best asking price of $0.99. There were 32 bid orders and 17 ask orders.

This represents the second IPO in the last year to have closed below its IPO price on its listing day. RA Williams Distributors Limited closed at $0.78 on its first day in August 2024 after listing at $1 per share, with the stock currently trading at $0.63.

“I also wish to congratulate the company on its success as it has now onboarded 3,218 new shareholders and has increased the number of investors in the market. No doubt, these shareholders, through their contributions at AGMs and investor briefings, will be your sounding board and provide you with the feedback necessary for future growth,” stated outgoing JSE Managing Director Marlene Street Forrest on Friday.

The second day (April 7) was no better for Atlantic as it stock price remained firm at $0.92 with 595,761 shares changing hands over 65 trades worth $548,775.63. The best bid was $0.90 with a best ask of $0.92. There were 28 bid orders relative to 39 ask orders.

The JSE MD also revealed that Atlantic’s IPO was oversubscribed by five per cent, a signal of low investor interest in the Junior Market offer. Atlantic’s IPO took place around the same time National Road Operating and Constructing Company Limited had its offer for sale related to its 20 per cent stake in TransJamaican Highway Limited. That offer garnered $12.28 billion worth of applications compared to the $9 billion upsized value of shares that were made available.

Atlantic’s offer also ran its full course from the opening date to closing date. Atlantic and RA Williams are the only two Junior Market offers in the last five years to remain open for the stipulated timeline versus other Junior Market IPOs which all closed earlier than the stipulated closing date.

Atlantic’s offer was fully underwritten by JMMB Securities Limited which meant that if the offer had received less than its target, JMMB Securities would have bought the difference. Investors in Atlantic’s reserved pools received all of their allotted shares while investors in the general public pool were guaranteed their first 100,000 shares and 64.48 per cent of the balance they applied for.

A large pro-rated allocation usually means that most investors tend to receive the shares they applied for in the offer compared to pro-rated allocations with lower balances which leaves most investors without their desired amounts. Dolla Financial’s June 2022 IPO saw investors in the general public pool receiving their first 10,000 shares guaranteed and 2.6 per cent of the excess balance. Dolla’s stock reached a peak price of $3.60 within its first six days of trading.

With Atlantic now listing on the Junior Market, the company will benefit from a 10-year tax remission with its shares now accessible to a wider pool of investors. Also, Atlantic’s debt balance should decrease from $1.36 billion to an estimated $655.14 million. Although Atlantic’s first quarter ends on March 31, its first quarterly report that needs to be published would be in August due to it listing after the quarter end.

Lumber Depot Limited, another Junior Market company that owned 35 per cent of Atlantic prior to the IPO, stated that it intended to participate in Atlantic’s IPO in its third quarter (November to January) report. Lumber depot reported a share of profit $6.37 million related to its Atlantic stake, which means that Atlantic earned an estimated $18.20 million in net profit.

Of the 14 companies that have gone public on the Junior Market since 2020, only six are currently trading above IPO price. Of the 48 companies currently on the Junior Market, 33 are trading above IPO price with most of these companies being the first set of companies that listed up to 2014. Lasco Manufacturing Limited and Lasco Distributors Limited, two companies that have graduated, have delivered the best returns of 2,952 per cent and 1,712 per cent, respectively from their October 2010 listing to April 2025.

The JSE Index is marginally down in 2025 to 335,698.49 points with a market capitalisation of $1.75 trillion while the Junior Market Index is down 4.75 per cent to 3,557.50 points with an estimated market cap of $142.63 billion. At the end of March, 27 of the 52 ordinary stocks were down on the Main Market while 29 of the 47 ordinary stocks were down on the Junior Market.

tTech delisted from the Junior Market at the end of February after a takeover bid by Simply Secure Limited. GraceKennedy Limited is currently intending to acquire the remaining shares of Key Insurance Company Limited which it intends to delist in short order. Key was originally listed on the Junior Market before graduating to the Main Market in April 2020. Fifty-six companies have listed on the Junior Market since April 2009 with two companies delisting and six companies graduating to the Main Market.