Top Line delays, shrinks IPO to P900M
Moved to Q2 this year

Top Line delays, shrinks IPO to P900M

/ 02:16 AM January 23, 2025

MANILA, Philippines — Top Line Business Development Corp. has cut its initial public offering (IPO) size by 71 percent to P900 million from P3.12 billion, saying that the new pricing would get “strong momentum” in the market.

The Cebu-based conglomerate said in a statement on Wednesday that it would offer to the public up to 2.15 billion primary common shares at up to P0.38 each, with an over allotment option of up to 214.84 million shares.

Should the option be fully exercised, this represents a shareholding of around 22 percent from 30 percent previously.

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READ: Top Line reschedules IPO to 2025

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“We appreciate the interest shown by potential investors in supporting our expansion and growth,” Top Line chair, president and CEO Erik Lim said.

“As such, we’ve adjusted our offer structure to reflect our adjusted capital requirements, and at the same time maintain regulatory compliance,” Lim added.

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At the same time, Top Line opted to delay its listing on the main board of the Philippine Stock Exchange to the second quarter of the year. It had initially planned a first-quarter listing under the ticker “TOP.”

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The company originally eyed a November 2024 IPO, which it moved to the first quarter this year.

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Top Line is set to be the first Cebu-based company to make its stock market debut in nearly eight years after Cebu Landmasters Inc.

Market changed

When the Lim family-led company announced plans to launch an IPO last year, it initially wanted to raise up to P3.12 billion, pricing its shares at up to P0.78 each.

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Alfred Benjamin Garcia, research head at stock brokerage house AP Securities Inc., said they had expected Top Line to downsize the IPO “given the changes in market conditions since they initiated the process of going public.”

“The previous valuation was quite high, and the market’s current appetite for risk likely won’t support those valuation levels,” Garcia said. “The current level of trade activity in the market also can’t support the IPO’s original size.”

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., pointed out that uncertainties around Donald Trump’s second term as US president and the upcoming midterm elections at home made it challenging for companies to go public.

However, the company cited discussions with potential institutional investors and its underwriters in adjusting its IPO size.

According to Investment and Capital Corp. of the Philippines (ICCP), Top Line’s issue manager, joint lead underwriter and joint bookrunner, the revised offer makes the company’s IPO “an attractive investment opportunity for investors.”

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The new structure is also based on Top Line’s compounded annual revenue growth rate of more than 49 percent from 2021 to 2023, ICCP said, noting that this outpaced the growth of other companies in the benchmark index. —Meg J. Adonis 

TAGS: initial public offering (IPO), Top Line Business Development Corp.

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