Demand for Xurpass IPO seen strong

Technology firm Xurpas Inc., a play on growing mobile-based Internet connectivity, has reported brisk demand for its P1.36-billion initial public offering.

As of Friday, the IPO was oversubscribed by four times the available offer shares. Xurpas is offering 344 million primary common shares at P3.97 per share, equivalent to 18 times the projected earnings for 2015. The offering was also priced at about 1.07 times the post-IPO book value of P3.72 per share.

Elsewhere in the world, technology firms like Google are trading at price to earnings multiples of 30 to 33 times.

The report on the oversubscription of Xurpass’ IPO was based on demand generated by SB Capital, the sole issue manager, sole bookrunner and lead underwriter from foreign and domestic long-only institutional investors.

Xurpas has received approval from the Philippine Stock Exchange for the listing of its common shares under the small, medium and emerging board on Dec. 2 under the ticker “X.” The offering starts today until Nov. 25.

The company is principally owned by Nico Jose Nolledo, Raymond Gerard Racaza and Fernando Jude Garcia. The owners have more than 15 years of experience in the information and communications technologies (ICT) sector.

Each of these technopreneurs will own 26 percent of Xurpas, which will be valued at P6.8 billion after the IPO.

Xurpas was set up 13 years ago with a capital of P62,500.

“We are pleasantly surprised by the strong investor interest in the company. According to the bookrunner, our shares are at present four times oversubscribed, a good indication of the strong demand for the ICT industry,” said Nolledo.

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.

In the first half of the year, about 82 percent of the business came from the consumer (end-user) segment and the remainder from the enterprise segment. It serves about four million consumers in the Philippines.

Nolledo said during an investor briefing on Friday that Xurpas had leveraged on the growth of mobile Internet in the country, in turn driven by growing affordability of Internet access and mobile handsets.