IPOs poised to make a strong comeback in 2024
The country’s leading investment bank is primed for an initial public offering (IPO) comeback in 2024 as it prepares to launch over P100 billion in deals as soon as interest rates come down amid easing price pressures.
BDO Capital & Investment Corp. president Eduardo Francisco said they were lining up as many as six IPOs in 2024—double the number of the firms that went public this year and multiples larger in terms of the money they intend to raise.
“The IPO market is coming alive but it might still be in the second half of the year,” he told reporters last week.
The largest of these was a P55-billion IPO by the Sy family-led SM Group’s real estate investment trust arm, followed by ports and gaming mogul Enrique Razon Jr.’s Prime Infrastructure Capital Inc., which earlier aimed to raise about P33 billion, and tycoon Edgar Saavedra’s Citicore Renewable Energy Corp., which could raise around P15 billion.
BDO Capital is also arranging the planned IPO of OceanaGold Philippines Inc., the local unit of Australian-Canadian mining group OceanaGold; a food manufacturing company, which could raise up to P3 billion; and a real estate investment trust.
“After the first rate cut, that’s already a signal we can do an IPO since investors will be looking at riskier assets [like stocks] because of the higher yield,” Francisco said.
He added that popular restaurant groups such as Wildflour and Mary Grace had also explored public listing options but were not keen on doing so anytime soon.
BDO expects the Bangko Sentral ng Pilipinas to begin lowering the benchmark rate in September 2024. However, this could come sooner depending on actions taken by the US Federal Reserve, Francisco said.
The Monetary Board last week kept the benchmark interest rate steady for a second straight meeting while the US Fed also paused hikes and indicated three rate cuts in 2024.
The PSE will narrowly miss its fundraising target this year as investors shunned stocks and shifted to bonds to lock in better returns.
Capital raised on the bourse has so far amounted to about P140 billion, which was 12 percent below its initial target of P160 billion.
This includes three IPOs (Alternergy Holdings Corp., Upson International Corp., and Repower Energy Development Corp.), which raised a combined P13.1 billion.
Meanwhile, there were 15 bond listings this year valued at P203.3 billion, data from the Philippine Dealing & Exchange Corp. showed.
Volatile market conditions in 2023 forced some IPO candidates to delay their public listing plans and instead turned to alternative funding sources.
The Olivares family-led housing developer Ovialand Inc., one of the largest affordable housing developers south of Metro Manila, pushed back a P2.2-billion IPO this year and has decided to finance its expansion with a foreign joint venture partner. —Miguel R. Camus INQ
