SINGAPORE — The ValueMax Group, one of the oldest pawnbroking chains here, yesterday launched a S$70.4 million initial public offering, seeking to be the first in its industry to list on the mainboard of the Singapore Exchange.

The company is selling 138 million new shares at S$0.51 each, representing 25.9 per cent of its enlarged issued share capital after the IPO. About five million shares will be offered to the public, while the remaining 133 million will be offered under the placement tranche.

Trading is scheduled for Oct 30.

ValueMax is set to become the third local pawnbroker to list in Singapore, following Maxi-Cash Financial Services Corporation’s debut in June last year and MoneyMax Financial Services’ listing in August this year. Both are on the Catalist board.

Faced with rising living costs and tighter credit, pawnshop businesses — which are increasingly moving away from intimidating shopfronts with metal bars to sport modern-looking stores — are gaining favour with both consumers and investors.

Maxi-Cash has risen about 38.3 per cent since its debut, while MoneyMax has gained 20 per cent. Both stocks had the same initial public offering price of 30 cents a share.

The number of pawnbrokers in Singapore has increased to 201 as of Oct 1, from 138 in 2009, according to the Insolvency and Public Trustee’s Office. Pawnshop loans given out amounted to S$7.1 billion last year, 3.9 times those in 2008, according to Reuters.

ValueMax — which opened its first pawnbroking outlet in 1988 — said it plans to use the net proceeds of about S$66.3 million to expand its business and for working capital purposes. It currently owns 17 outlets in Singapore and five stores through associated companies in Malaysia, and has plans to acquire businesses, set up new shops and expand overseas, it said.

It posted revenue of S$509 million and profit attributable to owners of the company of S$14.3 million last year.