Thailand
Thailand set to become South-east Asia’s IPO star this year
THAILAND is shaping up to be the biggest South-east Asian initial public offering market this year, with the country’s biggest packaging company kicking off a US$1.27 billion offering on Monday.
SCG Packaging Pcl set a price range of 33.50 baht to 35 baht for its 1.13 billion share offering, putting the Siam Cement Pcl unit’s float on course to be Thailand’s second-largest offering this year.
Almost US$3 billion has been raised from Thai IPOs so far in 2020, most of it from Central Retail Corp’s US$2.5 billion IPO in February before global markets saw the worst of the impact from the Covid-19 pandemic.
SCG Packaging’s IPO was approved in May but the company had later said it was unsure about the timing amid the spread of the virus.
“The packaging business has become a crown jewel of Siam Cement with the explosive growth of e-commerce and food-delivery demand amid the pandemic,” said Tawatchai Asawapornchai, deputy managing director at ASL Securities Co. “The company may view the window of opportunity as small with no ending of the coronavirus outbreak any time soon.”
SCG Packaging has already allocated 677 million new shares, or 60 per cent of the offering, to 18 local and foreign funds as cornerstone investors, the filing showed.
Kasikorn Asset Management Co and BBL Asset Management Co are the biggest buyers among 14 domestic institutions, while Avanda Investment Management Pte and NTAsian Discovery Master Fund are among the largest international investors.
The company plans to use proceeds from the offering to fund business expansion and new acquisitions as well as debt repayment, according to its filing. Its net income in the first half of this year jumped 40 per cent to 3.64 billion baht (S$158 million), while total sales climbed 11 per cent to 45.9 billion baht.
Across South-east Asia, just US$4.23 billion has been raised from first-time share sales, 21 per cent down from the same period a year earlier, according to data compiled by Bloomberg.
No other market in the region has had IPO volumes exceeding US$1 billion this year, the data show.
Singapore is closest with US$515 million raised. Just US$71 million, a decade low, has been raised in Malaysia, although issuers there are gearing up again.
Relatively lower liquidity and lagging stock-market performance in South-east Asia has meant share sales in the region have been slower to recover versus other markets like Hong Kong and China, both of which have enjoyed some of their busiest periods in years.
Many countries in South-east Asia are also lagging in emerging from novel coronavirus-induced lockdowns. The second quarter was one of the slowest for South-east Asian IPOs in more than a decade.
Some US$605 million was raised in the region in the three months to June, the second-lowest quarter since US$330 million was raised in the third quarter of 2009. BLOOMBERG