Becamex IDC IPO suffers from own indifference

17:35 | 01/12/2017
Despite being considered the second largest initial public offering (IPO) deal, Becamex IDC Corporation’s apathy in communications as well as in publicising information about its IPO plan resulted in 94 per cent of the offered stake being unmarketable.
Aerial view of the Binh Duong smart city scheme

The Ho Chi Minh City Stock Exchange has released the results of Becamex IDC’s IPO organised this morning. Accordingly, 149 of 158 registered investors won in the bidding with the highest and lowest buying prices of VND40,000 and VND31,000 per share.

After the bidding, Becamex, which is the domestic partner in Vietnam's leading industrial park and township developer VSIP, only acquired VND587.7 billion ($25.87 million) from selling 18.9 million shares or 6 per cent of the offered share volume. Originally, Becamex IDC offered 311.2 million shares at the initial price of VND31,000 ($1.36), with the expectation of earning VND9.65 trillion ($423.1 million) from the deal.

It is a surprise that while other enterprises, especially large-scale enterprises owned by State Capital Investment Corporation, have been ready to communicate their IPO plans to draw in as many investors as possible—Sabeco and Vinamilk even organised roadshows abroad—, Becamex’s IPO deal was largely a quiet business. Notably, with the exception of publishing the bidding and divestment plans, Becamex IDC released no further information.

There are opinions that the reason behind Becamex IDC remaining silent was that finding more investors via the IPO ranked rather low among the company’s priorities as it is currently collecting resources to develop the Binh Duong smart city project.

In late November, the Binh Duong People’s Committee, in collaboration with the consultancy firm from the Netherlands, organised a conference to introduce the Binh Duong smart city project, attracting more than 1,000 participants.

At the event, the province launched the new phase in the implementation of the project. At the same time, provincial leaders emphasised that Becamex IDC, with its strong financial potential and massive land area in the project, is considered the turnkey investor in developing the city.

Becamex IDC is a leading name in the development of industrial, residential, urban, and transportation infrastructure in Vietnam.

It currently has 28 subsidiaries and joint ventures in a multitude of areas from finance and banking through real estate to telecommunication-information technology, with a charter capital of approximately VND5.5 trillion ($242.1 million).

Besides, it owns a massive volume of golden land plots in Binh Duong province. Notably, Became IDC owns 700 hectares in the Binh Duong smart city project. In case this land plot is valued at VND10 million ($440.25) per square metre, its total assets are estimated at more than VND70 trillion ($3.08 billion), seven times higher than its equity as of the end of the second quarter of this year.

The 700-hectare area is just a part of the total 3,000 hectares that Becamex IDC is allocated to develop housing projects. In addition, it was allocated other massive areas to develop large-scale industrial park projects.

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By By Ha Vy

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