1 month ago
23
The country’s investment houses are considering an agreement to carve out among themselves equally the huge $1 billion to $1.5 billion initial public offering (IPO) of Globe Fintech Innovations, Inc. (Mynt), which owns top e-wallet GCash.
This is according to Investment House Association of the Philippines (IHAP) Corporate Secretary and Investment & Capital Corporation of the Philippines Managing Director Jesus Mariano P. Ocampo in a recent interview.
He recalled that this was what was previously done in the case of Petron Corporation during the IPO heyday of the mid-1990s, when stock offerings—particularly that of the oil giant—were so hot because they were considered sure things that gave investors substantial returns.
Petron had its IPO on Sept. 7, 1994—the same year that it was privatized. Petron’s IPO was known as the “mother of all IPOs,” attracting 500,000 shareholders as the allocations for shares were chopped into bite sizes to make them affordable for small investors as well as to give more people a piece of the action.
The GCash IPO is being eyed for the second semester of this year, after the midterm elections, and Ocampo said it looks like it will push through regardless of market conditions.
“We are now discussing within the IHAP that maybe we can underwrite the IPO as a club so all houses will be part of it. Just like Petron back in the days when all investment houses were able to participate,” he noted.
Last October, Mynt invited banks to pitch for an IPO, and Abacus Securities Corporation noted that, “At the upper end of this range, and assuming a float of 20 percent, the fintech would be valued at $7.5 billion.”
“We know little about the nuts and bolts of GCash but, based on what is publicly available, plus what we have been able to gather or derive on our own, we believe this figure would be more than justified,” it added.
It noted though that, “while we think the IPO would be more than sellable at such valuation, the key is whether or not the share price would still have significant upside. This is a major question mark especially for institutional investors who would need to soak up a lot of the shares.”
However, stock analysts, including those from Abacus and COL Financial, expressed concern over Globe’s fourth-quarter 2024 financial performance, as it showed that GCash’s contribution to Globe’s earnings had fallen by 56.6 percent from 2023.
“The fintech’s contribution in the final quarter was just P338 million, or less than one-fourth of what we had projected. This is a real head-scratcher considering Mynt is gearing up for a potential IPO in the second half of the year and it makes us wonder if there was a one-off within the fourth quarter,” said Abacus.
It added that, “We would like to get additional details from management, particularly on why Mynt’s fourth quarter was much weaker” although it noted that, “we believe that the underlying causes are temporary and Globe should revert to growth in the current quarter.”
