By Ashley Erika O. Jose, Reporter
COMPANIES planning to list on the Philippine Stock Exchange, Inc. (PSE) with an initial public offering (IPO) exceeding P5 billion may seek relief to supply lower than the required 20% public float, because the Securities and Exchange Commission (SEC) considers providing flexibility on the rule.
“If there are requests for exemptive relief, then that’s assessed on a case-to-case basis,” SEC Commissioner McJill Bryant T. Fernandez told reporters on the sidelines of the InvestPH 2025 forum on Wednesday.
“Ultimately, the thought is we’re firm with the 20%, [but] it gives you some relief and there’s a period it is best to comply with the 20%,” he also said.
To date this yr, no latest company has joined the stock market, but mobile wallet provider GCash, water utility Maynilad Water Services, Inc., and Cebu-based fuel retailer Top Line Business Development Corp. might achieve this soon.
Globe Telecom, Inc. recently said it might seek regulatory relief from the 20% minimum public ownership (MPO) rule for the planned GCash IPO.
“There may be a 20% minimum requirement for IPOs, but we have now been in a position to get an approval from the SEC,” PSE President Ramon S. Monzon told reporters individually.
Firms can offer 15% initially, provided they commit to conducting a follow-on offering or private placement inside the following two to 3 years to comply with the 20% minimum public float requirement, Mr. Monzon said.
He said this measure goals to encourage undecided firms to proceed with their listing.
Mr. Monzon said GCash qualifies for this exemption, because the only criterion is that the IPO must exceed P5 billion.
Further, he said this is just not a everlasting policy and that the PSE will reassess its effectiveness in the approaching years. “Now we have a two-year window, then if that’s not working, we’ll extend it for an additional two years.”
Globe President and Chief Executive Officer Ernest L. Cu recently said the GCash IPO could goal an $8-billion valuation and might occur by yearend.
Bloomberg previously reported that GCash’s IPO could raise as much as $1.5 billion.
Hunted for comment, BDO Capital & Investment Corp. President Eduardo V. Francisco said the regulator’s move could drive strong demand despite market uncertainties.
“The brand new rule granting public float flexibility for giant IPOs may factor into the decision-making of certain IPO candidates, particularly firms that find it difficult to satisfy the 20% threshold,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
He said this will likely help persuade GCash to list this yr.
“Nevertheless, it’s vital to consider that the general public float requirement is just not the one consideration for firms planning an IPO,” he added.
“In addition they have a look at investor sentiment, market liquidity, listing costs, and regulatory obligations, that are in turn tied to other aspects. So, there continues to be quite a bit more that may be done to reinvigorate our stock market,” Mr. Colet said.
