The Market Monitor Minding the Nation's Business
By Riza Lozada
Construction materials retailer Wilcon Depot Inc., which had its initial public offer (IPO) last Friday, aims to boost sales by as much as 20 percent starting next year with an aggressive store expansion program to be funded by the P7-billion proceeds from the float, which was the largest all-domestic offering in the capital market.
Wilcon chairman and founder William Belo said the company was expanding to Visayas and Mindanao (VisMin) in a bid to reach up to 20-percent sales growth and raise its market share, which is now over 50 percent.
He said more than half of its planned 27 new stores would be rolled out in VisMin areas over the next five years.
Belo said the company will have five more stores in the Visayas and three in Mindanao by the end 2017. It already opened a store in Butuan last January.
He noted around 81 percent, or about P5.67 billion, of the IPO proceeds would be used for store expansion.
The remaining amount of over P1.3 billion will be used to pay down some debts and for general corporate purposes.
Wilcon shares in market debut closed at P5.33 per share in its Friday debut, up 5.54 percent from an IPO price of P5.05 each. It opened at P5.30 per share.
Justino Juan Ocampo, Executive Vice President of First Metro Investment Corp. (FMIC), told reporters the overall subscription was about 3.7 times, which he considered a “healthy number”.
“It’s a small-sized issue, we are very happy with the market reception. It is largely domestic issue however there was a good number of orders from international investors banking on course on the strong Wilcon story,” he said.
On the domestic side, Ocampo added it was healthy shares from institutional and retail investors, with the former cornering more than 50 percent.
“I think this is the largest all-domestic IPO ever in the capital market. The total offer size was around Php7 billion, that has never happened before,” Gabriel Lim, Senior Vice President of BDO Capital and Investment Corp., said.
“I think this is the litmus test of the increase in depth of the domestic capital market. This has opened the doors to other issuers to brave an all-domestic offering,” Lim added.
FMIC is the issue manager and bookrunner, and together with BDO Capital and Investment , also acts as joint lead underwriter for the IPO.
“We are seeing a very good market for domestic (investors)… The domestic market has very good appetite,” Belo added.