The Philippine Stock Exchange is urging more small and medium enterprises (SMEs) to list on its SME board in 2015 following the successful initial public offerings of technology firm Xurpas Inc. and property developer DoubleDragon Properties Corp.
DoubleDragon Properties Corp. raised P1.16 billion and listed last April 7 while Xurpas raised P1.37 billion and listed on Dec. 2.
From the IPO price of P2 a share, shares of DoubleDragon are now trading at P7.20 each, giving it a market capitalization of P16.28 billion as of Friday’s closing.
Xurpas, for its part, is now trading at P9.05 a share or more than double its IPO price of P3.97 a share.
It now has a market capitalization of P15.5 billion.
“As the economy experiences prolonged high growth levels, it is inevitable that the gains become more inclusive even at the corporate level. The companies that listed on the SME board this year support this observation as we see smaller-sized and emerging companies starting to seek capital market-based funding to expand their operations,” PSE president and chief executive officer Hans Sicat said.
The PSE simplified its listing board structure in 2013 to make room for more of these small, medium and emerging companies into the stock market while enhancing the governance requirements to further investor protection.
To be listed on the SME Board, the PSE requires a company to have an authorized capital stock of at least P100 million, of which a maximum 25 percent must be subscribed and fully paid.
The company should also have a cumulative cash flow based on earnings before interest, taxes, depreciation and amortization (Ebitda) of at least P15 million, excluding non-recurring and extraordinary income and/or loss, for the last three fiscal years immediately preceding the application for listing.
Likewise, the company must have a positive Ebitda in at least two full fiscal years immediately preceding the application for listing, including the fiscal year immediately preceding the application.
“We hope that the market’s overwhelming response to the share sale of DoubleDragon and Xurpas will encourage more SMEs to consider listing on the exchange,” Sicat added.
DoubleDragon was previously known as Injap Land Corp., which started in 2009 as a wholly owned subsidiary of Injap Investments Inc., the holding firm of Edgar Sia who founded the “Mang Inasal” grilled chicken chain.
HoneyStar Holdings of Jollibee Foods Corp. founder and former chief executive officer Tony Tan Caktiong later acquired 50 percent of the company, which thus became an equal venture. DoubleDragon is building an inventory of a million square meters of leasable space by 2020 by creating a chain of 100 community malls under the “CityMall” brand alongside other commercial and office developments.
Xurpas, meanwhile, is a technology company specializing in the creation and development of digital products and services for mobile end-users. Its portfolio includes online casual games, messaging and other social discovery applications as well as call/SMS/ data bundles, peer-to-peer mobile airtime credit transfers and mobile commerce.
It was founded 13 years ago by young technopreneurs Nico Jose Nolledo, Raymond Gerard Racaza and Fernando Jude.
To support this initiative to bring more SMEs public, the PSE has conducted seminars and discussions with the Development Bank of the Philippines (DBP), start-up technology firms, and small and medium enterprise owners.