XURPAS Inc., a leading independent mobile consumer content provider in the country, has firmed up its initial public offering (IPO) worth P1.36 billion.
Based on an offering memorandum from the Philippine Stock Exchange, Xurpas will offer 344 million primary common shares at a price of P3.97 apiece.
Xurpas priced its IPO below the maximum price of P4.19 a share despite strong demand generated by SB Capital Investment Corp., the sole issue manager and lead underwriter.
The lower pricing was meant to leave more upside for the investing public, which will own 20 percent of the company after the maiden offer.
The offering will run from Nov. 17 to 25, while listing on the PSE is scheduled on Dec. 2.
Xurpas has also mandated First Metro Investment Corp. and Unicapital Inc. as co-lead underwriters, as well as Philippine Commercial Capital Inc., PentaCapital Investment Corp and Abacus Capital & Investment Corp as participating underwriters in this stock debut.
“It’s a small float, but I think the stock will probably do well since it’s a relatively new concept to the market. It’s hard to predict earnings at this point, but I think it might do well because it’s something new. And if you look at how apps fared in the US, like Instagram, they did very well after listing,” said Richard Liboro, director at BPI Securities. “Earnings may not be a factor. It’s a concept play at this point.”
Liboro added that the market may find comfort with Xurpas’ management, especially as one of the board members is Alvin Lao, chief finance officer of D&L Industries, which is now gaining a strong following in the market.
A substantial volume of demand for Xurpas shares is coming from domestic and foreign qualified institutional buyers alongside funds who are expected to be long-term holders.
About 60 percent of the proceeds will be used to fund the company’s expansion in Indonesia, Bangladesh and Thailand. About 20 percent will be allocated for development and expansion of existing content, and the remaining 20 percent will be spent for general corporate purposes.
In the first half of this year, Xurpas’ net income more than doubled to P104.84 million from P44.33 million in the first half of the prior year on the back of surging revenues that doubled year-on-year to P189.64 million. Assuming a similar performance in the second half of this year, annualized net income for the full year 2014 may reach reach P210 million, from revenues of around P380 million.
Xurpas is a technology company specializing in the creation and development of digital products and services for mobile end-users, as well as the creation, development and management of proprietary platforms for mobile operators. It is owned and managed by a young team composed of Nico Jose Nolledo, Raymond Gerard Racaza and Fernando Jude Garcia, each of whom have accumulated over 15 years of experience in the information technology and communication industry.
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