Retailer Merry Mart Consumer Corp. has priced its initial public offering (IPO)—the first in the local stock market this year—at P1 a share.
The IPO is seen to attract investors seeking a COVID-19 pandemic-resilient retail play.
The offering was priced at the ceiling as it was oversubscribed by 2.1 times the base offer, said Gerry Valenciano, president of PNB Capital and Investment Corp., the sole underwriter for the offering.
In a text message on Friday, Valenciano said this indicated “strong demand and interest from local institutional investors.”
“MerryMart is seen to be the only nondiscretionary, basic essential retail play next to Puregold,” Valenciano said. “The sector is quite defensive amid the COVID-19 crisis as consumers prioritize spending for essential goods.”
This price will allow MerryMart to raise P1.6 billion from the public offering, which will run from May 27 to June 5. Listing will be on June 15 under the ticker “MM.”
“Given the effects of the pandemic, we expect to secure many prime sites across the country for MerryMart Store, as many prime ground floor commercial spaces that would have been difficult to secure would now be available, which would fast-track the market penetration of MerryMart,” 43-year-old company founder and CEO Edgar Sia II said on Friday.
“The expansion of MerryMart will help generate very much needed employment and help stimulate our economy,” Sia said.
This equity deal for MerryMart will bring its market capitalization to P7.59 billion upon its listing on the small, medium and emerging (SME) board of the Philippine Stock Exchange (PSE) under the ticker “MM” on June 15.
Sia said the offering would be purely domestic, or without any allocation for foreign investors.
Retail investors will be able to buy the IPO shares online via the PSE Electronic Allocation System during the offer period. The minimum subscription will be P1,000 and a maximum of P100,000.
This is seen as the second purely nondiscretionary retail play in the market after Puregold Price Club. This segment—which includes groceries and pharmacies selling essential goods that people consume in good times or bad—is seen resilient to the looming economic recession caused by COVID-19 and the consequent lockdown measures. —Doris Dumlao-Abadilla