For Monde Nissin IPO, allotment cap for retail investors raised to P 1M

As Monde Nissin Corp. launched the largest initial public offering (IPO) in Philippine stock market history and the biggest equity deal out of Southeast Asia’s food and beverage segment, local small investors were given leeway to gobble up as much as P1 million worth of shares, 10 times larger than the usual value of shares that retail investors can buy through the online platform of the local bourse.

The Securities and Exchange Commission has approved an expansion in the maximum allotment for local small investors (LSIs) through the Philippine Stock Exchange Electronic Allocation System (PSE EASy) platform from the usual P100,000 but only for the IPO of Monde Nissin.

In consideration of offer size

A Philippine Stock Exchange (PSE) source explained that the PSE’s approval of the larger allotment was in consideration of the size of Monde Nissin’s IPO, which could reach as much as P55.89 billion, including the overallotment option.

Companies going public in the country are required to reserve 10 percent of their offering for small investors. In the case of Monde Nissin, this amounts to some P5 billion, which will be hard to execute if maximum allotment is kept at P100,000 worth.

About 3.6 billion common shares are up for grabs at P13.50 share, with an overallotment option of another 540 million common shares granted by the selling shareholder.

The expansion in PSE Easy IPO allotment comes as Monde Nissin eclipsed all other stock market debuts seen by the local stock market, including Converge ICT Solutions’ P29-billion offering in 2020, SM Investments’ P28.75-billion offering in 2005 and that of Robinsons Retail Holdings Inc. worth 28.12 billion in 2013.

Through PSE EASy, small investors can participate in IPOs by subscribing to a maximum of P100,000 worth of shares. This gives them an alternative option to take part in public offerings when they cannot get any allotment from their stock brokers.

The larger allotment is also seen to harness the growing power of small investors in the local stock market.

At the IPO of P13.50 a share, the book has been fully covered by 11 institutions that had committed to become “cornerstone” investors in the company behind iconic brands such as Lucky Me! noodles, Skyflakes crackers, Fita crackers, Monde baked goods and Quorn meat-free products.

Listing on June 1

The 11 cornerstone investors are: AIA Investment Management Private Ltd., Stichting Depositary APG Emerging Markets Equity Pool, Avanda Investment Management Pte. Ltd., The Capital Group Funds, Eastspring Investments (Singapore) Ltd., FIL Investment Management (Hong Kong) Ltd., GIC Private Ltd., Goldman Sachs Asset Management (Singapore) Pte. Ltd., M&G Investment Management Ltd., NS Partners Ltd. and RWC Asset Advisors (US) LLC.

The offer period for Philippine-based trading participants and retail investors started on May 19 and will run until May 25.

Monde Nissin’s common shares are scheduled to begin trading on the main board of the PSE on June 1 under the stock symbol “MONDE”.

The company intends to use the net proceeds from the primary offer to fund capital expenditures, redeem the Arran Convertible Note and repay loans to commercial banks.

The IPO will bring to public hands about 20 percent of Monde Nissin’s shares. INQ