MYNT, Inc.’s planned initial public offering (IPO) is weighted heavily toward shares being sold by existing shareholders, a structure that may influence how investors assess the deal, according to an analyst.
The GCash operator plans to offer up to 1.61 billion primary shares and 6.42 billion secondary shares, with a separate overallotment option of up to 1.20 billion secondary shares, following the Philippine Stock Exchange’s (PSE) approval of its listing application last week.
“Another consideration is that most of the offering consists of secondary shares,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message. “That does not necessarily weaken the investment case, but investors may distinguish between capital being raised to fund Mynt’s future growth and proceeds going to existing shareholders,” he added.
Mr. Arce said pricing remains another key consideration for the offering.
Mynt has set a maximum offer price of P10 per share, while the final offer price is scheduled to be determined on Oct. 1 following the bookbuilding exercise.
“The PSE approval reduces execution uncertainty and is positive for sentiment, but it does not change the fundamental question surrounding the IPO: whether valuation is attractive enough to generate strong demand at this scale,” Mr. Arce said.
“At the maximum P10 offer price, Mynt would have a post-IPO market capitalization of roughly P669 billion, so investors will have to be comfortable that its growth and profitability justify that valuation,” he added.
“I would therefore pay more attention to the outcome of bookbuilding and where the final price is set than to the approval itself,” Mr. Arce said.
He said the offering could attract interest because it would give investors exposure to GCash and the broader digital financial-services sector, which he said is relatively differentiated from the traditional sectors that dominate the Philippine stock market.
Mr. Arce said the IPO’s availability through GStocks could also broaden retail participation, while the involvement of international investment banks could help reach foreign institutional investors.
Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said before the PSE approval that investors should look beyond the P10 maximum indicative price and focus on the valuation that emerges from the bookbuilding process.
“The P10 is a ceiling, not a promise, and certainly not a measure of whether the IPO succeeds or fails. Price discovery is precisely what bookbuilding is for,” Mr. Ravelas said last week.
“What matters is the quality of that demand. You want an offer that is properly priced, supported by investors who understand the business and its risks, and capable of sustaining liquidity after listing. Pricing below the ceiling can actually be healthy if it leaves room for long-term value creation,” he added.
The PSE on Friday approved Mynt’s IPO application, clearing the way for the company to list on the exchange’s Main Board under the ticker symbol GCASH.
The IPO covers up to 8.03 billion primary and secondary common shares, consisting of up to 1.61 billion primary shares and 6.42 billion secondary shares, with an overallotment option of up to 1.20 billion secondary shares.
The shares are scheduled to be offered from Oct. 6 to 12, with the tentative listing date set for Oct. 20.
The PSE said proceeds from the primary shares would be used for digital financial-services growth initiatives, product development, and general corporate purposes.
The exchange has said the transaction could become the largest public offering in PSE history. — Alexandria Grace C. Magno