By Revin Mikhael D. Ochave, Reporter
CEBU-BASED fuel retailer Top Line Business Development Corp. (Topline) has lowered the dimensions of its planned initial public offering (IPO) to around P900 million from the previous P3.16 billion after talks with potential institutional investors.
Amid adjustments to the IPO, Topline is aiming to be listed on the local bourse by the second quarter of this yr, the corporate said in an e-mailed statement on Wednesday.
The corporate initially scheduled the IPO’s offer period from Nov. 27 to Dec. 3 last yr, with a tentative listing date of Dec. 12. Nevertheless, it opted to maneuver the offer period to the primary quarter of this yr to accommodate institutional investors.
Topline said its IPO now consists of as much as 2.15 billion primary common shares with an overallotment option of as much as 214.84 million secondary shares. Its public float might be around 22% assuming the total exercise of the overallotment option.
The corporate slashed the indicative offer price to as much as 38 centavos apiece from the previous as much as 78 centavos per share, subject to a bookbuilding process.
Topline’s revised IPO offering is lower than the previous 3.68 billion primary shares with an overallotment option of as much as 368.31 million secondary shares, corresponding to about 30% of total issued and outstanding common shares.
“We appreciate the interest shown by potential investors in supporting our expansion and growth. As such, we’ve adjusted our offer structure to reflect our adjusted capital requirements, and at the identical time maintain regulatory compliance,” Top Line Chairman, President, and Chief Executive Officer Eugene Erik C. Lim said.
“We’re excited to be the maiden IPO this yr and the primary company from Metro Cebu to go public in almost a decade,” he added.
Topline said its underwriters “expressed confidence within the offering’s structure, believing that the revised offer structure will position Top Line for strong momentum in the general public markets.”
The corporate tapped Investment & Capital Corp. of the Philippines (ICCP) and PNB Capital and Investment Corp. because the joint lead underwriters and joint bookrunners for the offer.
“We consider that the revised offer structure makes this IPO a sexy investment opportunity for investors in search of strong value and growth given the corporate’s compounded annual revenue growth rate of greater than 49% from 2021 to 2023 — outpacing the expansion of constituent corporations of the Philippine Stock Exchange Index (PSEi),” ICCP said.
“Topline’s ability to draw interest from institutional investors also speaks of their confidence in the corporate’s fundamentals and its promising trajectory. We’re of the view that Top Line could possibly be a growth catalyst for the capital markets in 2025,” PNB Capital said.
Hunted for comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message that the move by Topline was expected amid market conditions.
“We actually expected Topline to trim each the dimensions and pricing of its IPO given the changes in market conditions since they initiated the technique of going public,” he said.
“The previous valuation was quite high, and the market’s current appetite for risk likely won’t support those valuation levels. The present level of trade activity available in the market can also’t support the IPO’s original size,” he added.
The PSEi dropped to six,265.52 on Jan. 16, its lowest close in nearly seven months or because it ended at 6,158.48 on June 21, 2024, but has since recovered barely.
On Wednesday, the PSEi improved by 0.12% or 8.13 points to six,348.34.
“They’re a promising company, but it surely’s a really tough IPO market, so I’m not surprised that they cut the deal size and price to make the offering more attractive,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
“With the stock market trading near the low end of its 52-week range, and given the uncertainties around Trump 2.0 and our midterm elections, it’s generally difficult for corporations to do an IPO.
Investors have to see not only a compelling story but an excellent bargain,” he added.
Topline is engaged in industrial fuel trading, depot operations, and retail fuel within the Visayas region.
The corporate has two subsidiaries, namely Topline Logistics and Development Corp., envisioned to have interaction within the importation, trading, distribution, and marketing of petroleum-based products, and Light Fuels Corp., involved within the fuel retail business.
The PSE goals to have six IPOs this yr, with Topline among the many expected corporations to go public.
