Wilcon chair and founder William Belo (center) with daughter Lorraine Belo-Cincochan (Wilcon president) and son Mark Andrew Belo (Wilcon chief financial officer)
Shares of Wilcon Depot, the country’s leading home improvement and construction supplier retailer, gained 5.54 percent on inaugural trading on Friday as domestic investors warmly welcomed a new retail play in the stock market.
The P7.03 billion initial public offering (IPO), snapped up entirely by local investors, marked the largest all-domestic IPO in the country to date. The country’s first IPO for 2017 was oversubscribed by 3.7 times the base offer, said Justino Juan Ocampo, executive vice president at First Metro Investment Corp. (FMIC) which is the issue manager, bookrunner and joint lead underwriter for the issuance.
“This is a litmus test of the depth of the domestic capital markets. This has opened the door for other issuers to brave an all-domestic offering,” said Gabriel Lim, senior vice president at BDO Capital & Investment Corp. which acted as the joint lead underwriter.
While having an international portion would be good, Lim said foreign placements were typically more susceptible to overseas market volatility.
The old thinking among investment bankers, Lim said, was that beyond an IPO size of P4-P5 billion, an issuer may need to sell some shares to the overseas market.
The capacity of the domestic market to absorb larger IPOs is seen reflective of ample financial liquidity as well as optimism among local investors.
From its IPO price of P5.05 per share, Wilcon Depot – now trading under the ticker WLCON – ended its first day of trading at P5.33 per share, giving it a market capitalization of P20.7 billion. It was the most actively traded company at the stock market, with about P1 billion of shares traded on Friday.
Ocampo said there was healthy split of demand from institutional and retail domestic investors who knew about the 40-year-old Wilcon brand. Institutional investors accounted for a bit higher than 50 percent of total take-up, he said.
In a press briefing after the listing ceremonies, Wilcon Depot chair and founder William Belo said he was upbeat on his company’s expansion plans. He expects same store sales growth to be sustained at 5-6 percent, similar to the pace seen in the last few years.
Wilcon plans to build a network of 65 stores across the country with a net selling space of around 530,000 square meters in the next five years or more than double the current net selling area of about 250,000 square meters in its 37 stores. At present, Wilcon generates annual sales of about P55,000 to P60,000 from each square meter of selling space.
“This market debut may just be the beginning of even more exciting things to come for Wilcon especially as it solidifies its position in the market. The story of Wilcon parallels the story of many Filipino entrepreneurs whose modest business operations have been transformed by their big and ambitious goals and aspirations to eventually become a publicly-listed company. I hope that other entrepreneurs will also take that bold step to open their companies to the public and be listed at the PSE,” PSE chair Jose Pardo said in his welcome remarks during the listing ceremony.
Wilcon bucked the overall downturn in the local stock market on its trading debut.
Shown in the photos above during the listing ceremony are (from left): Johnny Litton; Tessa Prieto-Valdez; Wilcon Independent Director Ricardo Pascua; Wilcon Director, Executive Vice President and Chief Product Officer Careen Belo; Wilcon President & CEO Lorraine Belo-Cincochan; Wilcon Director, Senior Executive Vice President and Chief Operating Officer Rosemarie Bosch-Ong; Wilcon Director, Treasurer and Chief Financial Officer Mark Andrew Y. Belo; Wilcon Founder and Chairman William T. Belo; PSE Chairman Jose T. Pardo; PSE Director Ma. Vivian Yuchengco; PSE President and CEO Hans B. Sicat; PSE Treasurer Omelita J. Tiangco; PSE Chief Operating Officer Roel A. Refran and PSE Director Alejandro T. Yu.