Maynilad IPO seen to open floodgates to more issuers

MANILA, Philippines — Security Bank Capital, the investment banking arm of Security Bank Corp., said the maiden offering of Maynilad Water Services Inc. could open the floodgates to a more robust initial public offering (IPO) market in the country next year.

“We’re hoping that the Maynilad IPO does well post-listing and that will actually encourage issuers to come out again and investors to invest and buy shares,” Security Bank Capital president and CEO Virgilio Chua said.

“So we’re bullish about that IPO because it’s been quite some time since we’ve seen a significant IPO. Last year, we had three IPOs but relatively very small. The Maynilad IPO in itself is about P34 billion,” Chua said.

Maynilad is targeting to raise as much as P34.3 billion from the offering of up to 1.66 billion primary common shares to the public and a preferential offer of up to 24.9 million primary common shares to First Pacific Co. Ltd. at P15 per share.

Security Bank Corp.-Trust and Asset Management Group is joining as one of the domestic cornerstone investors in the offer.

“We’re very positive and excited for that upcoming IPO, notwithstanding all the issues on the corruption on the construction projects, they were able to push through with the bookbuilding and priced the IPO. Initially, it was targeted at P20 per share, but we were able to achieve P15 per share and it is oversubscribed on the oversubscription volume,” Security Bank Capital coverage and origination team head Maria Margarita Antoinette Lee said.

“So we see that there’s still a lot of interest, especially from foreign investors. We have good quality cornerstone investors coming in, such as International Finance Corp. and Asian Development Bank. We believe that Maynilad will be performing well also in the secondary market,” Lee said.

Offer period for Maynilad’s IPO starts today and will end on Oct. 29, with listing on the Philippine Stock Exchange on Nov. 7 under the trading symbol “MYNLD.”

At present, however, Chua said it is still hard to say what next year’s IPO pipeline would look like.

“I know GCash has deferred theirs. SM Prime REIT has deferred theirs as well. So we don’t know. Maybe they will reconsider, but that is just my own opinion, that with the improvements in the sentiment in the equity capital market, maybe they will be encouraged to actually go out,” he said.