Tiu family's NexGen Energy Corp. (XG) advanced on its first trading day, partly thanks to the support from underwriters led by China Bank Capital Corp.
NexGen, the third company to go public in 2024, rose as much as 9.5 percent before closing at P1.71 per share, a gain of 1.79 percent over its initial public offering (IPO) price of P1.68 per share.
The company, trading under the symbol XG, raised P504 million in proceeds to expand its renewable energy portfolio.
Another 45 million shares were made available through an over-allotment option, with a portion taken up by underwriters.
Big picture
NexGen’s modest but positive first-day performance could lift sentiments for future IPOs.
Significant macroeconomic risks persist, with most sidelined IPOs waiting for inflationary pressures to ease and clearer indications that interest rates will come down.
The owner of the Clark, Pampanga-based integrated casino Hann Resorts is among those waiting to launch a potential P12-billion listing in the latter part of 2024.
NexGen saw support from underwriters during its first trading day.
In a stock exchange filing on Tuesday, the company said China Bank Capital and Investment & Capital Corp. purchased 15 million shares worth P25.2 million.
It noted that China Bank Securities may purchase from the market up to 15 million shares.
Execution risk?
Ahead of the IPO, Alfred Benjamin R. Garcia, head of research at AP Securities Inc., advised investors of a potential first-day pop in the share price but highlighted possible long-term challenges.
He also noted similarities between NexGen and affiliate Repower Energy Development Corp. (REDC), which went public in 2023.
“Both companies acquired their operating assets after these facilities reached commercial operations, which gives them no track record of actually developing projects from scratch,” Garcia said.
“Both are also very small compared to other listed RE developers, and same as our thoughts on REDC, we see XG only as a potential acquisition target for larger developers to gobble up when the industry starts to consolidate,” he added.
NexGen is planning 17 projects, aiming for a total capacity of 1,683 Megawattts, with an estimated cost of P134 billion, Garcia said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
