Prospective investors in the anticipated IPO of operator Mynt demanded a discount, and they’re likely to receive one.
Market insiders familiar with discussions are pointing to an IPO price somewhere below P7 a share, well under the P10 maximum initially used to value the country’s biggest fintech platform.
And while some will argue this isn’t technically a discount since P10 was never the final offer price, it was the only published price investors had to value the deal against.
It also tracks with discussions we’ve been hearing from the Ayala Group’s Zobel family, which is insistent that money be left on the table for IPO investors.
“If the [venture capital/private equity firms] need to exit even with market conditions being so bad right now, then I guess they have to accept more depressed valuations,” said April Lynn Tan, chief equity strategist at COL Financial Group, told InsiderPH.
“I don't think it's a reflection of GCash's fundamentals,” she added.
These are still internal estimates of where the final price may land, with the actual IPO price still to be determined through discussions with large sellers and buyers.
Some big money is already circling, with early interest in the IPO coming from two respected domestic fund management groups. More names are expected to emerge in the coming weeks.
While new money is lining up, some investors are on the way to cashing out—and that has always been part of the deal.
It’s no secret this particular IPO is driven by the need for its early private equity investors to monetize their shares.
It’s a normal function of capital markets where investors need to realize a profit from risks they took early on.
At the same time, GCash’s biggest investors, Ayala Corp. and Globe Telecom, are not selling their shares, a clear vote of confidence in its long-term prospects despite the uncertain conditions facing the economy.
The price will be set on Oct. 1 this year. Discussions so far appear to be in the upper P6 range, although that will surely narrow in the coming weeks.
Because no one asked, here’s our suggestion: Why not P6.88?
It leaves potential upside, with a little lucky eights thrown in for good measure.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
