The Best IPO Stock Trades of 2023: Explosive Opportunities After the Pandemic

 

Several initial public offers (IPOs) have prospered in the local stock exchange in earlier years. There are organizations that have

gone public as a way of attaining their goals including expansion, acquisitions, and innovation even against apparent market

uncertainty, especially with the present pandemic hurting the economy significantly.

The Philippine Stock Exchange (PSE) has seen the following major initial public offerings (IPOs) over the previous five years.

 

• MerryMart

Despite the economic turmoil caused by the pandemic, four companies pushed forward with their initial public offerings (IPOs) in the Philippine Stock Exchange (PSE) last year. One of the most notable IPOs was that of MerryMart Consumer Corp. (PSE: MM), a fast-growing grocery chain owned by businessman Edgar “Injap” J. Sia II. On June 15, amidst one of the most challenging economic climates in recent history, MerryMart successfully went public, demonstrating strong investor confidence in the company’s long-term vision.

As part of its IPO, MerryMart made 1.59 billion shares available to the public, raising a total of P1.6 billion. The stock debuted at P1.00 per share and ended its first trading day at P1.50 per share, reflecting a significant jump in investor interest. The IPO was managed by PNB Capital and Investment Corp., which acted as the lead underwriter, issue manager, and bookrunner. The company’s stock market performance indicated strong demand from retail and institutional investors who were optimistic about MerryMart’s potential for growth in the highly competitive retail sector.

MerryMart has set ambitious expansion goals, planning to operate 1,200 locations across the country by 2030. The company’s aggressive strategy includes launching 100 new stores by the fourth quarter of 2021, positioning itself as a major player in the local supermarket industry. This expansion plan highlights MerryMart’s commitment to capturing a larger market share and solidifying its presence in the retail landscape.

The grocery retail sector has proven to be resilient even in times of crisis, and MerryMart’s IPO success underscores the attractiveness of consumer-driven businesses in the stock market. The company’s asset-light model, which focuses on strategic partnerships and franchising, enables rapid expansion while keeping capital expenditures low. This business approach is designed to sustain long-term profitability, making MerryMart an appealing stock for investors seeking exposure to the retail sector.

 

• APVI

Following MerryMart’s successful stock market debut, Altus Property Ventures, Inc. (PSE: APVI) became the next company to enter the PSE on June 26. Unlike MerryMart, APVI did not immediately make its shares available to the public through a traditional IPO but instead entered the stock market via introduction, a method where shares are listed without an initial public offering.

APVI was formerly a subsidiary of Robinsons Land Corporation (PSE: RLC), one of the leading real estate developers in the Philippines. Upon listing, APVI’s shares were initially priced at P10.10 per share. However, strong investor demand caused the stock price to skyrocket to a peak of P240 per share on its first trading day before closing at P18.50 per share. This volatility demonstrated both the speculative nature of newly listed stocks and the enthusiasm of investors for new real estate ventures.

The listing was managed by First Metro Investment Corporation (First Metro), which served as the financial adviser for the transaction. APVI’s entrance into the stock market was particularly notable because it highlighted investor interest in the real estate sector, even amid economic uncertainties.

APVI primarily focuses on property development and leasing, capitalizing on the continued demand for commercial and mixed-use real estate projects. With an increasing need for residential and retail spaces in urban centers, APVI aims to leverage its strong ties to Robinsons Land Corporation while establishing its own identity in the stock market.

The success of both MerryMart and APVI’s stock market debuts demonstrates that, despite economic downturns, investors remain optimistic about companies with strong business models and clear growth trajectories. These IPOs serve as examples of how businesses can use the stock market to raise capital, fund expansion, and attract long-term investors.

 

• AREIT, Inc.

In a historic move for the Philippine stock market, AREIT, Inc. (PSE: AREIT), a subsidiary of Ayala Land, Inc., became the first real estate investment trust (REIT) in the country. Launched in August 2020, AREIT’s initial public offering (IPO) raised a total of P12.33 billion, marking a significant milestone in the Philippine real estate sector.

Despite an initial price of P27 per share, AREIT’s stock closed at P24.90 on its first trading day, August 13, 2020. However, investor interest in the company remained strong, as evidenced by the twofold oversubscription of the offering by August 3, demonstrating high demand for REIT investments in the country.

The IPO was backed by a consortium of leading financial institutions. BPI Capital Corp. served as the sole global coordinator and joint bookrunner for the offering. The domestic underwriters included BPI Capital, PNB Capital, and SB Capital Investment Corp., while UBS AG Singapore Branch acted as the exclusive international bookrunner. This strong financial backing ensured a successful market debut despite economic uncertainties at the time.

Utilization of IPO Proceeds and Portfolio Expansion

The funds raised from AREIT’s IPO were strategically allocated to expand its real estate portfolio and acquire high-value commercial properties in key locations across the Philippines. Among the first acquisitions funded by the IPO proceeds was Teleperformance Cebu, a premium office property catering to the country’s booming business process outsourcing (BPO) sector.

AREIT’s existing property portfolio includes several prime commercial assets, such as:

• Solaris One – A 24-story commercial building located in Makati’s central business district (CBD), housing various multinational firms and corporate offices.

• Ayala North Exchange – A mixed-use development with premium office spaces, retail establishments, and hotel accommodations, strategically positioned in Makati City.

• McKinley Exchange – A five-story commercial office building situated in Bonifacio Global City (BGC), Taguig, another major financial and commercial hub.

With these prime assets, AREIT offers investors stable rental income and capital appreciation opportunities, making it an attractive option for those looking to invest in income-generating real estate properties without the need for direct property ownership.

• Converge ICT

Converge ICT Solutions, Inc. (Converge ICT), a fiber Internet service provider, launched its IPO on October 26 amid increased

efforts by telcos to address the rising demand for connection. Converge ICT’s first public offering, which totaled P29.08 billion and

offered up to 1.51 billion common shares at P16.80 apiece, was the largest offering to date. This amount is higher than the

P28.11 billion raised in 2013 by Robinsons Retail Holdings, Inc.

 

BDO Capital & Investment Corp. (BDO Capital) was chosen as the joint local underwriter and joint bookrunner for the IPO, while

BPI Capital served as the sole local coordinator, joint local underwriter, and sole bookrunner. Among the local underwriters who

are participating are First Metro and PNB Capital.

 

About 90% of the net proceeds from the offering will be used by Converge ICT (PSE: CNVRG), owned by Pampanga-based

entrepreneur Dennis Anthony H. Uy, to finance capital expenditures as it grows nationally. Currently, its services are available throughout Luzon, particularly in Metro Manila.

 

• Fruitas

Fruitas Holdings, Inc., a company that operates fruit and beverage kiosks, entered the market in 2019. (PSE: FRUIT). Fruitas

shares debuted at P1.82 per share, up 8% from P1.68 per share in its initial public offering. The stock rose as high as P2.45

before ending at P1.71 per share. With an over-allotment option of up to 68,340,000 outstanding common shares, the business

offered 533,660,000 primary common shares.

 

As joint issue managers, bookrunners, and lead underwriters for the offering, BDO Capital and First Metro were chosen.

 

Fruitas hopes to raise P1.2 billion through the IPO, which the company would use to pay off debt and finance

its expansion goals, acquisitions, and introduction of fresh ideas. Fruitas has set a goal to open 150 to 250 outlets annually over

the following three years ever since the IPO got underway.

 

• DMWAI

In spite of market volatility, D.M. Wenceslao & Associates, Inc. (DMWAI) was one of the businesses that went public in 2018.

DMWAI (PSE: DMW) intends to sell 679.17 million shares under its P17.89 billion initial public offering at a price of P22.90 per

share, with an over-allotment option of up to 101.88 million shares.

 

Maybank King Eng Securities Pte. and BPI Capital Ltd. were chosen to serve as the offer’s joint worldwide coordinators and

bookrunners; the latter also served as the international lead manager and underwriter. DMWAI planned to use the net proceeds

of the issuance to finance its projects in the 204-hectare Aseana City in Paranaque City.

 

• Wilcon Depot

Wilcon Depot, Inc. (PSE: WLCON), a retailer of building supplies and home improvement products, made its debut on the stock

market in 2017 with a P7.92 billion initial public offering (IPO) that included about 1.4 billion common shares priced at P5.68 each.

For the initial share offering, the store recruited First Metro as the issue manager and bookrunner and BDO Capital as a joint lead

underwriter.

 

Wilcon anticipated making P7.58 billion from the IPO at the top price. Prior to 2018, it planned to allocate P500 million for general

company purposes, P972.4 million for debt repayment, and P6.11 billion for store network growth.

 

• Cemex

Cemex Holdings Philippines, Inc. (PSE: CHP), the Philippine subsidiary of Mexican cement and building materials giant Cemex

S.A.B. de C.V., was the largest initial public offering (IPO) in 2016 previous to Converge ICT, raising P25.1 billion at a price of

P10.75 per share.

The business planned to use the net revenues from the IPO to pay off short-term obligations so that it could use internally

produced money to finance the $300 million expansion of its Solid Plant in Antipolo City, Rizal.

 

 

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