VRG’s “blockbuster” IPO drowns in disinterest

The VRG's IPO attracted only 499 investors

With only 21 per cent of the shares registered to buy, the IPO of Vietnam Rubber Group (VRG) at the Ho Chi Minh City Stock Exchange (HoSE) was the most boring of this year’s “blockbuster” IPOs.

As many as 499 investors registered to buy approximately 101 million VRG shares, equivalent to 21 per cent of the 475.1 million shares put on offer. 34.2 million shares were registered by domestic individuals, 507,200 shares by foreign individuals, 39.4 million shares by domestic organisations, and 26.66 million shares by foreign organisations.

Eventually, 498 investors auctioned successfully with the highest and lowest selling price of VND20,800 and VND13,000 (the initial price). The average selling price was VND13,011, essentially the initial price. State will acquire VND1.311 trillion ($57.75 million), equaling 21 per cent of the plan.

Thereby, this IPO has been the most disappointing in the year so far. Earlier, the three big IPOs of BSR, PV Oil, and PV Power in January were very successful, sell all shares put on offer at high average selling prices.

According to the approved equitisation solution, VRG’s charter capital after equitisation is expected at VND40 trillion ($1.76 billion), equivalent to 4 billion shares. That the state expected to retain 75 per cent of the shares and foreign investors were not welcomed as strategic partners are probably the reasons behind the apathy towards the IPO.

At the auction, Pham Van Thanh, member of the VRG Board of Directors, said the company will register on the unlisted public company market (UPCoM) on April 1. Then, it is expected to be listed on HoSE in June or July this year.

He also informed of VRG’s business outcomes, stating that revenue and profit exceeded the plan by 10 and 30 per cent. VRG’s consolidated revenue hit VND21 trillion ($0.93 billion), and after-tax profit hit VND4.1 trillion ($0.18 billion).

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