Posted on March 08, 2015 10:15:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter
MASS HOUSING developer Profriends Group, Inc. is looking to make its stock market debut in the first half of the year, the transaction’s underwriter said, adding that the entry of anchor investors will likely mean a change in the size of the initial public offering (IPO).
“We ran out of time last year. It’s effectively redoing everything. It will take a bit of time but we’re looking at first half of this year. That’s the target,” First Metro Investment Corp. (FMIC) President Roberto Juanchito T. Dispo said in a recent interview.
FMIC is one of the underwriters Profriends hired for its IPO, along with BDO Capital and Investments Corp.
Profriends plans to raise P7.7 billion from the sale of 385.75 million primary common shares at a maximum price of P20 apiece to bankroll the development of its projects and finance its bid to boost its land bank.
The offer shares represent 11% of the company’s outstanding capital stock.
Further delays in the IPO may be risky for Profriends and other companies that want to raise funds from the equities market amid growing speculation that the US Federal Reserve may increase interest rates in the second half of the year.
“Sentiment in the market is still okay and that’s what Profriends wants to ride on,” Joyce Anne J. Ramos, stock analyst at AB Capital Securities, Inc., said in a phone interview.
“There is speculation that the Fed hike may happen in the second half of the year. That is the risk if that happens this year,” Ms. Ramos said.
Demand for Profriends shares has remained strong, Mr. Dispo said, with two regional investors looking at participating in the maiden share sale.
“If the issuer wants, they can buy as much as 10% which is the intended IPO size. The issuer may have to probably increase the float to accommodate the anchor investors,” Mr. Dispo said.
“Or the issuer will decide to stick to 11% and less shares will be allocated for the anchor investors,” he added.
Anchor investors get first dibs on the offer and usually join on the first day of order taking, boosting investor confidence.
Capital raised in the stock market is expected to hit P200 billion this year with the Philippine Stock Exchange eyeing to bring 10 new names to the local bourse either through an IPO, listing by way of introduction, or backdoor listing.