Property leasing and management firm Kepwealth Property Phils. Inc. (KPPI) completed on Friday a P384.8-million initial public offering (IPO)—the first in the local stock market this year.
The offering was oversubscribed by almost two times the IPO size, said Eduardo Francisco, president of BDO Capital & Investment Corp. which acted as the sole issue manager, underwriter, and sole bookrunner.
“It was a small IPO so we didn’t even need to market,” Francisco said, adding that the trading participant and local small investor (LSI) tranches were fully subscribed.
KPPI sold 67.032 million shares at P5.74 per share, bringing to public hands about a third of its outstanding stock. This valuation gave it a market capitalization of P1.15 billion.
At P5.74 per share, KPPI’s stock debut was priced at the “high side” and was valued at almost 25 times projected earnings, close to the valuation of bigger developers like Ayala Land Inc., Francisco said.
KPPI’s key investment propositions are as follow: diversified and high-quality tenant base; focus on recurring income business; flexible, scalable operations; proven management track record; being well-positioned to benefit from positive macroeconomic growth trends; ability to quickly establish business presence, and synergy with shareholders and related parties.
This was also the first company to test the Philippine Stock Exchange (PSE)’s online LSI subscription platform. There were about 500 of such small investors who participated in the offering, Francisco said.
The offering ran from Aug. 5 to 9. Listing on the PSE is set for Aug. 19.
KPPI owns a mix of office and residential building in Kepwealth Center Cebu, a Philippine Economic Zone Authority-accredited 15-storey property in Cebu. It also acts as an asset manager for commercial, office, and residential units in several buildings across Metro Manila including Oxford Suites (60 units), Medical Plaza Ortigas (79 units), Burgundy Corporate Tower (91 units), Burgundy West Bay Tower (59 units), Atrium Mall (43 units), Icon Macapagal (98 units), and Vivaldi Residences-Cubao Commercial Space (29 units). It also recently entered into an agreement for the management of 96 units of Luxe Madrigal.