New public float rule seen to fuel ‘mega’ IPOs
A long-planned move to bring homegrown unicorn GCash to public hands is seen to gain ground after regulators lowered the minimum public float for large companies, analysts said.
Newly-issued Securities and Exchange Commission (SEC) Memorandum Circular No. 11, Series of 2026, lowered the minimum public float for companies with expected market capitalization of over P50 billion to 15 percent, with flexibility to go as low as 12 percent for exceptionally large listings.
“The new structure recognizes that the liquidity, valuation dynamics, and investor participation patterns of ‘small-cap’ and ‘mega-cap’ companies differ materially,” SEC Chair Francis Lim said.
“By aligning public float requirements more closely with expected market capitalization at the time of listing, the Commission ensures that rules remain proportionate, economically rational, and responsive to prevailing market conditions,” he added.
Ron Acoba, chief investment strategist at Trading Edge Consultancy, said the regulatory change would make it easier for massive firms to pursue an initial public offering (IPO), citing GCash as a prime example.
“GCash pre-IPO valuation was already $5 billion. On that alone, 20 percent is already $1 billion, so that’s roughly P59 billion,” Acoba said.
“With the current state of the local market, it wouldn’t be able to absorb such a big initial public offering (IPO). Lowering it to 15 percent or lower would,” he added.
Reducing the public float lowers the value of shares offered to investors, making large deals more manageable for the local market.
Acoba said the move could also reshape the Philippine Stock Exchange Index (PSEi), which tracks the country’s largest, most liquid and most valuable listed companies.
“Another implication is that the PSE will possibly lower the minimum float requirement for PSEi inclusion to 15 percent as well so that these mega cap companies will be represented,” he said.
He added that AboitizPower, which had been previously part of the benchmark index before being dropped in 2023, could be among the first to stage a comeback.
Estella Villamiel, head of institutional reof institutional research at First Metro Securities Brokerage Corp., said the relaxed float rules should benefit the market by allowing large issuers like Mynt, parent company of GCash, to structure and time their IPOs more flexibly while improving turnover and broadening investor participation.
Juan Paolo Colet, managing director at China Bank Capital Corp., likewise said the move was clearly meant to attract large IPOs.
“The move stems from a realization that current market conditions require a lower public float so that it makes sense to list in the Philippines,” Colet added.
“Hopefully this makes it easier for GCash and Maya to consider doing their mega-IPOs in the Philippines,” he said. “The rules could also facilitate the IPO of Land Bank of the Philippines as the government would be able to keep a larger stake in the bank.”
However, Colet said regulators must ensure investor protection is not compromised.
“Given the lower MPO (minimum public ownership) level, the SEC and PSE should balance this by being more vigilant in protecting the interests of public shareholders,” he said.
“Moreover, the rule change should be seen as a temporary measure because the eventual goal should be to democratize wealth creation via increased public ownership,” he added.
