Becamex IDC To Hold Vietnam’s 2nd-Biggest Initial Public Offering
The Investment and Industrial Development Corporation (Becamex IDC) will float over 311.2 million shares, equivalent to 23.63% of its charter capital, in its initial public offering (IPO) on December 1 on the HCM Stock Exchange.
The initial price is set at VND31,000 (US$1.37) per share, the company has announced in a public statement.
At this price, the company is valued at VND40.83 trillion (US$1.8 billion) and expected to collect at least VND9.65 trillion from the share sale.
This is the second-largest IPO of a State-owned enterprise in the past 10 years since the Vietcombank’s IPO worth VND10.5 trillion on December 26, 2007.
Established in 1976, Becamex IDC is one of the biggest real estate companies in Vietnam, focusing on developing industrial, residential, urban and transportation infrastructure.
Under the equitisation plan approved by the Prime Minister, the State will retain 51% of the company’s charter capital worth VND13.17 trillion.
About 23.63% will be offered in an auction to the public while 4.94 million shares, equivalent to 0.37%, will be sold to its employees. The remaining shares (about 25%) will be tendered to strategic investors after the IPO.
The IPO is open to both domestic and foreign individuals and institutions.
Becamex has 28 subsidiaries operating in securities, finance, insurance, banking and construction, as well real estate, telecommunications and information technology, besides concrete production, construction materials, mining, pharmaceuticals, healthcare and education.
The company owns four major industrial parks, including My Phuoc Residential and Industrial Park, Vietnam–Singapore Industrial Park, Bau Bang Residential and Industrial Park, and Binh Duong New Township of Industry, Service and Residential.
Rising foreign interest
Recently, foreign investors have showed strong interest in shares of infrastructure development companies, via trades on both stock exchanges and public auctions.
Foreign investors spent a net value of VND315 billion to purchase shares of Viglacera Corporation (VCG) and VND151 billion for shares of Tasco JSC (HUT) on the Ha Noi Stock Exchange in the first nine months.
They also paid nearly VND2 trillion to purchase majority shares of these two companies in their public share auctions or private placements.
In the IPO of Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO) on October 5, foreign investors also picked up 41.3 million shares, equivalent to 74.8% of its total offering, at the average winning price of VND23,940 per share, a 33.3% higher than the initial price.
Besides the expectation of business improvement of State-owned companies after equitisation, some analysts have said infrastructure development firms are usually large-scaled companies with stable operations, meeting the investment criteria of some foreign investment funds.