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Listed firms say IPO boosts business success

By Keren Concepcion G. Valmonte

EXECUTIVES of top listed companies attributed their success to the opportunities and funding they were able to unlock at the stock market through an initial public offering (IPO).

“I think it is evident from the stories and insights of our resource speakers that had their companies opted to remain private family entities, they may not have been able to fast-track their growth and expansion,” Philippine Stock Exchange (PSE) President and Chief Executive Officer Ramon S. Monzon said.

In a bid to boost listings, the PSE invited top executives of companies with successful IPO experiences to share their stories in an online briefing called “The Road to IPO.” At least 600 participants tuned into the live webcast.

“A very big percentage of our expansion and success is on account of the funding that we get from the IPO to such an extent that at this point, the company is practically debt-free except for the corporate notes that we issued last year,” Leonardo B. Dayao, director of Puregold Price Club, Inc., said.

Puregold had 69 stores before it listed at the local bourse. The grocery operator currently has 469 stores nationwide and is aiming to launch 30 to 40 new stores this year with two S&R warehouse clubs.

Bank of the Philippine Islands President and Chief Executive Officer Jose Teodoro K. Limcaoco, who also represented Ayala Corp. for the session, attributed the success of the pioneering real estate investment trust (REIT) AREIT, Inc. to its structure, which “allows public participation in the real estate market.”

“While the pandemic might have put a damper [on the market], in reality, if you have a good story, a good business plan, and a management team that performs, I think anyone can do a public offering,” Mr. Limcaoco said.

“The fundamentals will always triumph,” he added.

Finance Secretary Carlos G. Dominguez III said the private sector will be key to economic recovery post-pandemic.

“We believe that a strong private sector is the key to our recovery strategy,” Mr. Dominguez said. “Along with the national vaccination program, we continue advancing the policy reforms required to ignite business activity and restore consumer confidence.”

The PSE has also relaxed its rules for listing to encourage more companies, especially small, medium, and emerging (SME) firms, to consider listing at the stock market.

“The amendments aim to ensure that the PSE’s requirements are at par with those of its regional peers and remains competitive,” Emilio B. Aquino, chairperson and chief executive officer of the Securities and Exchange Commission, said.

He added that the amendments made for the listing requirements at the SME board are in line with government efforts to assist the growth of SME firms in the country.

Wilcon Depot, Inc., when it listed at the exchange in 2017, based its offer price on its expansion plans.

“We wanted to be upfront,” Wilcon President Lorraine Belo-Cincochan said. “We wanted to say ‘this is the expansion plan, this is where we want to put the money in, and this is what we’re going to do.’”

Wilcon has since added 27 new branches since its listing to a total of 65 branches. It plans to open nine more stores this year and is aiming to have 100 by 2025. The company’s market capitalization has also more than tripled to over $1.5 billion within four years from its IPO.

SM Investments Corp. (SMIC) Chairman Jose T. Sio reminded companies and their management “to deliver what it has promised.” SMIC had its IPO in 2005 and has since grown to become the largest capitalized company in the PSE.

“It is their responsibility to also provide long-term growth for the investor,” Mr. Sio said.

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