Vietnam to have the biggest IPO ever
Vincom Retail, the Vietnamese mall operator – a subsidiary of the Vingroup Corporation, launched on October 16 a domestic initial public offering (IPO) that could potentially become the country’s biggest-ever share sale from the private sector, with the estimated revenue of 713 million USD.
The unit of Vingroup, Vietnam’s largest developer, has selected investment banks to work on the offering and aims to sell up to 380.ww million shares in the institutional tranche and another 19 million for the retail tranche, offering an indicative range of 37,000 VND to 40,600 VND for each share. It aims to raise about 16.2 trillion VND or equivalent to 713 million USD, with all proceeds going to Vincom Retail’s private equity investors and other shareholders.
Vincom Retail is preparing to raise funds as economic growth in Vietnam raises living standards and increases shoppers’ disposable incomes. The benchmark Ho Chi Minh Stock Index this month hit its highest level since 2008, while the Asian Development Bank forecasts the nation’s economy will expand 6.3 percent this year.
A $713 million offering would also be the country’s largest IPO in a decade, trailing only the 2007 share sale from Bank for Foreign Trade of Vietnam JSC when it was chosen for a government pilot program for privatization in the banking sector. The last first-time share sale that topped $100 million came from local airline VietJet Aviation JSC, whose shares are up 48 percent since they started trading in February.
Middle-class and affluent consumers in the biggest Southeast Asia economies favor imported goods and international brands, which has driven retail growth in places like Kuala Lumpur, Manila and Bangkok, according to a September report by the Hong Kong Trade Development Council. Vietnam has the most optimistic retail outlook, and there’s plenty of room for further growth given modern retail is still at an initial development stage, the report shows.
Vincom Retail is the owner of series of shopping malls with brand such as Vincom Center, Vincom Mega Mall, Vincom Plaza, Vincom+.
At present, Vincom Retail has 7 shopping malls in Hanoi, 8 shopping malls in Ho Chi Minh city and 20 shopping malls in 18 provinces and cities across Vietnam, totaling 1.1 million square meters. Vincom Retail currently holds 60% shares in the retail market. The capital of Vincom Retail is 19 trillion VND, which is equivalent to 1.9 billion shares going to be listed on the stock market.
In 2013, Warburg Pincus led a consortium that bought a 20 percent stake in Vincom Retail, in the U.S. private equity firm’s first deal in Vietnam. It completed another $100 million investment two years later. Vincom Retail owns shopping centers including Vincom Mega Mall Royal City and Vincom Mega Mall Times City.
The existing prime assets of Vincom Retail include Vincom Dong Khoi and Vincom Thu Duc in HCM City, Vincom Ha Long in Quang Ninh Province, Vincom Ngo Quyen in Da Nang City, and Vincom Ba Trieu, Vincom Long Bien, Vincom Mega Mall Royal City and Vincom Mega Mall Times City in Ha Noi.
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