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Dennis Anthony Uy, Converge Information and Communications Technology (ICT) Solutions Inc. debuted on the stock market down 9.4 percent or P1.58 to P15.22 each on Monday.
The stock opened at P16.78, slightly below its offer price of P16.80, and fell to its intraday low of P14.92 for the day.
Converge shares also finished as the most traded and among the most declining of the day.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco attributed the Converge sell-off to its expensive valuation.
“At P16.80, our 2020 projected P / E (price to earnings) ratio for the stock was 48.64 times, which is relatively overvalued. That is why the share was sought at a lower price in the secondary market, ”explained Tantiangco.
In a disclosure to the exchange on Monday, the fiber internet provider said it raised about P29.1 billion, including shares for the over-allotment option, in the country’s largest initial public offering (IPO).
He added that the IPO attracted national and international investors, as it secured more than P4.86 billion of domestic demand.
It was also oversubscribed internationally and has attracted fundamental investors such as OMERS, Genesis, Thornburg and Macquarie.
“The significant fundamental investment of more than P10.93 billion ($ 225 million) covered approximately 40 percent of the base offering and investments by first-line institutional investors, long-term alone, accounted for more than 80 percent of the transaction, “said the company.
Global private equity firm Warburg Pincus, meanwhile, served as Converge’s largest and most important partner and investor.
“We celebrate our successful IPO today as an important milestone for the company and as evidence of our strong operational and technological capabilities. We are fully committed to building the largest fiber broadband network in the Philippines and providing affordable and reliable high-speed Internet connectivity to millions of Filipinos across the country, ”said Uy, Founder and CEO of Converge, it’s a statement.
“Our extensive proprietary end-to-end fiber broadband network will allow us to support the digitization of the Philippine economy. With our experienced senior management, differentiated offering and strong value proposition, Converge is well positioned to address this significantly underserved demand and create long-term value for our business and shareholders, ”he added.
Converge said it posted revenue of P6.5 billion in the first half of the year, 65 percent better than its figure in the same period last year.
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