IPOs this year to outshine 2024 debuts by 3X
Stock market debuts happening this year are expected to raise more capital than new listings made in 2024 by nearly three times.
This, as Maynilad Water Services Inc. is primed to record the country’s largest and last initial public offering (IPO) of 2025.
Maynilad started its IPO on Thursday, which investors hope will bring life back into the local equities market.
Should Maynilad fully exercise its oversubscription option due to high demand, it has the potential to raise up to P34.33 billion from its debut.
This will bring the total capital raised from two IPOs this year to at least P35 billion. That amount is significantly higher than last year’s P11.86 billion from three IPOs.
Given current market volatility, the Securities and Exchange Commission (SEC) also approved the planned price stabilization activities of UBS AG’s (UBS) Singapore Branch, the IPO’s stabilizing agent.
This will essentially allow UBS to purchase Maynilad shares from the open market within 30 days from the listing date should the shares fall below the IPO price of P15.
However, UBS may only purchase no more than the total number of overallotment shares sold through the offer. In Maynilad’s case, the offer includes an overallotment of up to 249.05 million shares.
Weekly reports
UBS is required to submit weekly to the SEC reports of any price stabilization activity within the 30-day period.
Maynilad’s offer period will run until Oct. 29. Listing is scheduled on Nov. 7 under the trading symbol “MYNLD.”
BPI Capital Corp. was tapped as the domestic lead underwriter for the offer, while The Hongkong and Shanghai Banking Corp. Ltd., Morgan Stanley Asia (Singapore) Pte. and UBS AG Singapore Branch acted as international underwriters.
Multilateral institutions International Finance Corp. and Asian Development Bank were the lead cornerstone investors. They pitched in $100 million and $145 million, respectively.
Subdued sentiment
Maynilad’s IPO comes at a challenging time for local equities, with investors shying away from the market due to negative sentiment.
Jonathan Ravelas, senior adviser at Reyes Tacandong and Co., earlier pointed out that the flood control scandal has caused the Philippine Stock Exchange Index (PSEi) to drop below the 6,000 psychological support level.
Year-to-date, the PSEi is down by around 7.9 percent.
“The PSEi’s decline is not just about numbers—it’s about sentiment. Investors are pricing in risk, not waiting for verdicts,” Ravelas said in an Inquirer column.
But investment banker Virgilio Chua, president and CEO of Security Bank Capital Investment Corp., said investors would gauge the performance of Maynilad post-IPO before deciding whether to return to the capital markets.
According to Chua, Maynilad’s debut was well-received and oversubscribed among institutional investors.
“We’re hoping that the Maynilad IPO does well post-listing and that will really encourage issuers to come out again and investors to invest and buy shares,” Chua earlier told reporters. “We’re bullish about that IPO.”
