By Denise A. Valdez, Reporter
SHARES in Fruitas Holdings, Inc. soared as much as 46% in their market debut on Friday, but closed only 1.79% higher amid overall negative market sentiment.
The food and beverage kiosk operator’s shares opened at P1.82 each, up 8% from its initial public offering (IPO) priceof P1.68 each. It reached as high as P2.45 before ending the day at P1.71 apiece.
Appetite for Fruitas’ IPO was strong. The company offered 533,660,000 primary common shares with an over-allotment option of up to 68,340,000 outstanding common shares, which it said was more than 2.5 times oversubscribed.
Fruitas’ market capitalization upon listing was P3.58 billion.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said despite the overall increase in its share price, Fruitas was not able to meet market expectations that were driven by its oversubscription during the IPO.
“Definitely not after reports (that it was almost) 3x oversubscribed. Anyway, a negative market sentiment will always influence the investors,” he said in a text message, referring to the decline of the main index on Friday.
The PSE index fell 29.70 points or 0.38% to close at 7,738.96 on Friday as investors reacted to US President Donald Trump’s signing of a pro-Hong Kong bill, once again raising worries on the country’s trade talks with China.
“It corrected when price could not surpass P2.45/share as local market was down,” Mr. Pangan added, referring to Fruitas shares.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez shared the same sentiment, saying in an email: “Fruitas had a disappointing IPO after it took back majority of its gains as it closed at P1.71 (from IPO price of P1.68) after reaching as high as P2.45 intraday.”
After the listing ceremony at the PSE Tower in Bonifacio Global City on Friday morning, Fruitas Chief Financial Adviser Calvin F. Chua bared the company’s aggressive expansion plans through 2022.
“We have set aside about P600 million in the next three years… The P600 million covers network expansion as well as store improvement and all the necessary logistics that we’ll need to actually deliver our products to our stores,” he said.
He added the capital expenditure will be supported by an estimate of “around P820 million” coming from net proceeds of around P1 billion from the IPO, and the rest from internally-generated cash.
Fruitas is targeting to open 150 to 250 stores every year in the next three years and to acquire foodservice businesses, introduce new concepts and diversify its distribution channels.
Proceeds from the IPO will also be used for debt repayment, commissary expansion and food park business expansion.
“Ang pangarap namin na ang bawat Pilipino ay tatangkilikin ang isa sa aming mga produkto araw-araw. Yang pangarap na yan… yan ang tatrabahuin namin [Our goal is for every Filipino to patronize at least one of our products every day. That goal… that’s what we’ll work for,” Fruitas President and Chief Executive Officer Lester C. Yu said at the briefing.
Fruitas is the fourth and last company to conduct its IPO in 2019, the others being Kepwealth Property Phils, Inc. in August and Axelum Resources Corp. and AllHome Corp. last month.