Maynilad IPO delay aligned with market conditions — analysts
By Revin Mikhael D. Ochave, Reporter
THE DECISION of Maynilad Water Services, Inc. (Maynilad) to delay its initial public offering (IPO) to no later than end-October reflects efforts to optimize pricing conditions amid weaker market sentiment caused by global geopolitical tensions, according to analysts.
“Maynilad’s decision to postpone its IPO to October is understandable given the recent shift in market sentiment following the United States’ strike on Iran,” DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message on Monday.
“Delaying the offering allows time for geopolitical tensions to ease and for investor confidence to recover — both of which are critical to the success of a major listing,” he added.
In a statement on Sunday, Maynilad said it moved the listing date of its IPO to no later than end-October from the initial schedule of July 17, citing potential demand from cornerstone investors.
Maynilad said it submitted an updated timetable to the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) to allow the inclusion of cornerstone investors. The company will list on the PSE under the trading symbol “MYNLD.”
“These investors have conveyed strong and sustained interest in participating in the offering, but requested additional time to complete their internal approval processes,” Maynilad said.
“The potential participation of these investors is expected to add even more value to Maynilad’s public offering and will be viewed positively by all investors and the markets at large,” it added.
On Sunday, Iran vowed to defend itself a day after the United States bombed three Iranian nuclear sites. The bombing came amid escalating tensions between Israel and Iran.
Amid the delay, Maynilad is expected to price its IPO at a discount to attract more investors and ensure demand, Unicapital Securities, Inc. Equity Research Analyst Peter Louise D.C. Garnace said in a Viber message.
“The deferment provides investors with additional time to evaluate key data points, including Maynilad’s first-half earnings performance, as well as developments on broader geopolitical risks such as the ongoing US trade tensions and escalating conflict in the Middle East, which could impact market sentiment and risk appetite,” he said.
“Maynilad’s postponement of its IPO to October 2025 is a move to accommodate anchor investors who we believe are crucial to the success of the issuance,” he added.
AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said institutional investors’ increased caution amid global macroeconomic and geopolitical headwinds may have influenced Maynilad’s decision to defer its IPO.
“(The adjustment) was something that we expected, as we’ve been hearing that demand for the offer was only strong at the lowest range of its offer price,” he said in a Viber message.
“At this point, it might be too early to tell since the situation is very dynamic on the global front. But it’s increasingly likely that we’ll see another reduction in the size and price of the IPO,” he added.
Maynilad’s IPO consists of 1.93 billion primary shares and 354.7 million secondary shares priced at up to P20 apiece. The secondary shares will be sold by the water provider’s principal shareholder, Maynilad Water Holding Company, Inc.
It is expected to generate up to P37.41 billion in net proceeds from the IPO, assuming the overallotment option and preferential offer are fully subscribed. Proceeds will be used for capital expenditures and general corporate purposes. Maynilad will not receive proceeds from the sale of secondary shares.
The water provider said the proposed IPO remains subject to the issuance of the SEC order of registration and certificate of permit to offer securities for sale, as well as full compliance with regulatory conditions.
“Maynilad continues to coordinate with regulators and is proceeding with all necessary requirements for the proposed IPO,” it said.
The bellwether Philippine Stock Exchange Index (PSEi) went down 1.91% or 121.49 points to 6,218.28 on Monday. This was the PSEi’s lowest finish in nearly two months or since the 6,158.48 close on April 24.
The revised IPO timetable follows the recent approval by the Economy and Development Council — formerly the National Economic and Development Authority Board — of a ten-year extension to the concession agreements of Maynilad and Manila Water Co., Inc. The extension aligns Maynilad’s contract term with the expiration of its legislative franchise in 2047.
Pangilinan-led conglomerate 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., has an interest in BusinessWorld through the Philippine Star Group, which it controls.
