Insider Spotlight
Big and small investors are scrambling for a slice of GCash’s nearly P60.9 billion listing, intensifying competition for shares as the country’s biggest-ever initial public offering (IPO) kicked off the domestic sale period on Tuesday.
BDO Capital & Investment Corp. president Eduardo Francisco said orders from large domestic institutions such as the Government Service Insurance System and Social Security System far exceeded expectations, prompting local dealmakers to seek a bigger allocation.
“The total demand we're seeing is exceeding historical demand for local IPOs,” Francisco told reporters on the sidelines of GCash’s investor briefing on Tuesday.
“We’re asking for a reallocation to get more shares,” he added.
Fighting for shares
“Once we get into the meeting room, we start elbowing each other and fighting over the allocation,” Francisco quipped.
“Outside, of course, we’re friends. But once we’re inside, we fight because we want shares for our customers,” he added.
Foreign tranche oversubscribed multiple times
The problem for local dealmakers is that foreign investors want those shares too, after orders from large institutions reached several times the entire P61-billion offer, InsiderPH reported earlier this week.
The institutional tranche already covers 70 percent of the firm offer, with the remaining 30 percent allocated through Philippine Stock Exchange brokers and the local small investor program.
From too many shares to “crumbs”
A local trader told InsiderPH that interest from clients was lukewarm until GCash parent Mynt priced the shares at P6.60 each, or 34 percent below the initial reference price of P10 per share.
“A few weeks ago the office was saying we have a lot of shares. Now it looks like we’re getting crumbs,” said the trader, who was struggling with how to allocate shares among clients.
“It doesn't matter how many more shares you can source, the demand is infinite,” he added.
At the final offer price, GCash would be valued at about P442 billion, making it the Philippines’ third-largest financial institution by market value after Sy-led BDO Unibank and Bank of the Philippine Islands, which is controlled by GCash shareholder Ayala Corp.
Hoping for a spillover
Meanwhile, Francisco is hoping that GCash can turn investor attention toward a Philippine stock market where trading has been weak and many shares remain near historic lows.
He said signs of that were already emerging during their investor roadshow in London, where GCash’s strong reception prompted foreign investors to ask what else they could buy in the Philippines.
“GCash is doing well. Are there other stocks that we should invest?” Francisco recalled investors asking.
“Hopefully, there’s a spillover effect to other stocks. GCash was priced well so they should revisit other stocks at historic lows," he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
