Property developer Italpinas Development Corp. remains on schedule to list at the Philippine Stock Exchange next week given strong demand for its initial public offering (IPO), the firm’s underwriter claimed.
While two other IPO hopefuls have shelved their plans given market volatility, Unicapital, Inc. Managing Director Leonardo Arguelles Jr. said Italpinas’ offering—which ended Friday—was oversubscribed given retail investor interest.
“The IPO was oversubscribed by 3.5 times. Most of investors were retail [rather than institutionals], taking up 60 percent of the offer,” Arguelles told The Manila Times in a text message.
Unicapital is the sole underwriter for the Italpinas IPO. The offer period ran from November 23 to 27 and the firm is set to list on the PSE’ Small, Medium and Emerging (SME) Board on December 7.
Like the last firm to go public, Italpinas trimmed its offer price to P3.60 apiece from P4.20. Proceeds from the sale of 57.622 million common shares totaled P207.44 million, down from the initially expected P242 million.
Net proceeds will be used for capital expenditures, land banking, loan obligations and general working capital.
After the IPO, Italpinas is expected to have a 26-percent public float and a market capitalization of P930.79 million.
Incorporated in January 2009 and formerly Italpinas Euroasian Design and Eco-Development Corp., the company is engaged in real estate development, focused on architectural design and environmentally sustainable developments.
Two other developers, Datem, Inc. and DM Wenceslao, Inc., in recent weeks announced that they were shelving their IPO plans given heightened market uncertainties. Unlike Italpinas, both planned to list on the PSE’s main board.
Last Friday, a day after cutting its IPO price by almost half, DM Wenceslao said it was instead looking to go public next year.
At a reduced price of P25 per share from P44, DM Wenceslao’s IPO would still have been the biggest for the year given expected proceeds of P10.729 billion.
DM Wenceslao was to list at the PSE on December 8 along with Datem, which had planned to raise up to P4.65 billion but announced that it was deferring its IPO last November 20.
Metro Retail Stores Group Inc. (MRSGI) was the last firm to list but was also forced to lower its offer price to P3.99 from P6.10 as the market saw increased volatility.
It raised P3.6 billion from the IPO, saw a slight price gain when it listed last November 24 but its shares have since fallen below the offer price.
Two firms saw more success earlier in the year, ahead of global volatility arising from fears of a US Federal Reserve rate hike. Crown Asia Chemicals Corp. and SBS Philippines Corp., raised P222.78 million and P1.15 billion, respectively.
Concerns over the Fed rate hike subsided in the third quarter but were resurrected given indication s that the US central bank would accelerate the “lift-off” to next month. Global markets have also been roiled by a slowdown in China.
The PSE, which initially targeted up to 10 IPOs in 2015, trimmed its goal to five a few months back. Italpinas will take the tally to just four for this year.