Maynilad sets final IPO price at PHP 15 per share after investor feedback

Maynilad Water Services, Inc. has set the final offer price for its initial public offering (IPO) at PHP 15 per share, matching the upper end of its revised price range, according to a notice from the Philippine Stock Exchange (PSE).

The final price was reduced from the earlier maximum of PHP 20 per share after feedback from cornerstone investors including the United Kingdom’s Mobilist, the International Finance Corp. (IFC) and the Asian Development Bank (ADB).

The offer, expected to be the biggest listing in the Philippines this year, has drawn strong demand from institutional investors.

The IFC and ADB are considering investments of USD 100 million and USD 145 million, respectively. Other investors expressing interest include Robeco Switzerland Ltd. with up to USD 20 million, as well as Abrdn Malaysia Sdn. Bhd., Maven Investment Partners Ltd. – Hong Kong Branch, Maybank Asset Management Singapore Pte. Ltd. and QRT Master Fund – Torus Fund SP.

Maynilad will offer as many as 1.66 billion common shares to the public, including 24.9 million primary shares allocated for First Pacific Co. Ltd. It will also have an overallotment option of as many as 249.05 million shares and an upsize option of 354.7 million secondary shares, which could bring the total offer to 2.29 billion shares.

At PHP 15 per share, the IPO could raise as much as PHP 34.3 billion in gross proceeds, which will be used for capital expenditures and general corporate purposes, according to its preliminary prospectus.

Analysts said the final price provides a reasonable entry point for investors given Maynilad’s strong fundamentals and steady performance in the water utility sector.

“At this price, it provides a fair entry point for investors, especially considering the company’s steady position as a key player in the water utility sector,” Luis A. Limlingan head of sales at Regina Capital Development Corp., said in a Viber message. “The cautious approach could support the firm even if market sentiment fluctuates.”

The valuation appears attractive, Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message, citing the west zone concessionaire’s strong growth track record and expansion plans.

“The company has exhibited good financial performance in recent years with revenue growing an average of 21% in 2023 and 2024, and net income growing at an average of 47.6% in 2023 and 2024,” he said. “Prospects are also good given the company’s noncyclical business nature and coverage expansion plans so at PHP 15, Maynilad’s IPO is deemed attractive.”

Maynilad provides sustainable water and wastewater services across 11 cities in Metro Manila — three of which are partially covered — and parts of Cavite province.

Alfred Benjamin R. Garcia, research head at AP Securities, Inc., described Maynilad as a “stable defensive stock” that offers reliable dividends and high earnings visibility.

“We believe that the offer is prudently priced and offers modest upside to garner investor interest,” he said via Viber. “The offer size and post-IPO market capitalization also make it a prime candidate for future Philippine Stock Exchange index inclusion.”

Independent investment house Unicapital, Inc. said listing is “just the beginning” of a company’s growth journey.

“An IPO isn’t just a financial decision; it’s a transformation of your business,” Unicapital Senior Vice-President for Investment Banking Pamela Victoriano said in a statement. “By focusing on internal readiness and laying strategic groundwork during market slowdowns, companies can position themselves to seize the moment and maximize valuations as opportunities arise.”

The offer period will run from Oct. 23 to 29, with trading set to begin on Nov. 7 under the ticker MYNLD.

The IPO was initially scheduled for July but was postponed to October to give cornerstone investors more time to participate and allow potential investors to better understand the company’s operations.

Under its 25-year concession agreement, Maynilad must list its shares by January 2027.

Metro Pacific Investments Corp., which holds a majority stake in Maynilad, is one of three Philippine subsidiaries of First Pacific Co. Ltd., alongside Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds an interest in BusinessWorld through the Philippine Star Group, which it controls. — Alexandria Grace C. Magno