Maynilad shares stay close to IPO price in market debut

Maynilad Water Services, Inc. closed slightly lower on its first trading day on Friday at P14.98 per share from its initial public offering (IPO) price of P15.

The shares slipped by P0.02 or 0.13% after opening at P15 and touching a low of P14.98, data from the Philippine Stock Exchange (PSE) showed. Around 100.81 million shares were traded, valued at P1.51 billion.

Maynilad’s debut placed its market capitalization at about P113.2 billion, with a free float level of 30.18%. A total of 7.62 billion common shares were listed under the industrial sector’s electricity, energy, power, and water sub-sector. Foreign ownership in the company is capped at 40%, in line with public utility regulations.

In a statement, Maynilad said the listing marks a “historic milestone” as President Ferdinand R. Marcos, Jr. joined company and PSE officials in ringing the bell to mark its official debut at the PSE Events Hall in Bonifacio Global City, Taguig.

“Through this IPO, Maynilad strengthens its capacity to fund major expansion and modernization programs for water and wastewater infrastructure across the West Zone—further advancing its mission to provide safe, reliable, and sustainable water and wastewater services to millions of Filipinos,” the company said.

The company’s P15-per-share IPO raised P34.3 billion in gross proceeds, which will be used for capital expenditures and general corporate purposes.

At a press briefing following the listing ceremony, Maynilad President and Chief Executive Officer Ramoncito S. Fernandez said the results of the IPO reaffirm investor confidence in the company’s fundamentals.

“We believe that Maynilad has very strong fundamentals and a long-term value proposition. We [also] believe that Maynilad is a solid investment, delivering essential water services with very predictable cash flows,” he said. “We got very positive feedback from both domestic and foreign investors, attesting to the company’s operational performance, capex (capital expenditure) plans, and dividend policy.”

During the same briefing, Maynilad Chief Financial Officer Ricardo F. Delos Reyes said total demand for the IPO reached 2.7 times the number of shares offered.

“As far as I know, we were oversubscribed, and the geographic distribution was: Asia investors accounted for 53.6%, European investors 14.7%, local investors 29.6%, and the U.S. finally at 1%,” he said.

Maynilad becomes the second and last company to list on the PSE this year and the largest since Monde Nissin Corp.’s P48.6-billion offering in 2021 with its IPO price.

PSE President and Chief Executive Officer Ramon S. Monzon said during the listing ceremony that Maynilad’s IPO demonstrated renewed foreign investor confidence in the local market.

“Maynilad had two foreign multilateral lenders, Asian Development Bank (ADB) and International Finance Corp. (IFC), investing in this IPO as anchor investors, along with six other foreign investors participating as cornerstone investors. Clearly, this disproves the doomsayers’ claim of foreign investor disinterest in our market,” Mr. Monzon said.

He added that the Securities and Exchange Commission awarded the country’s first Philippine Green Equity Label to Maynilad for its adherence to sustainability standards.

In his remarks during the ceremony, Mr. Marcos said the listing underscores confidence in the country’s capital markets and commitment to public accountability.

“With its IPO, Maynilad welcomes scrutiny and accountability. And in doing so, Maynilad can expand our capital markets and our shared belief that private enterprise can serve the public good,” the president said.

“Maynilad’s public listing signals what I have been telling the world: that the Philippines is open, ready, and eager to do business with you,” he added.

“Given the market’s prevailing bearish sentiment, it’s not surprising that Maynilad failed to gain traction on its market debut,” DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message.

“The stock’s current stability appears to be supported primarily by the stabilization fund, which, once exhausted, could lead to further downside pressure. Sentiment worsened following the softer-than-expected third-quarter gross domestic product (GDP) print released earlier, significantly missing forecasts.”

The Philippine economy expanded by 4% in the third quarter, the slowest pace since early 2021, bringing the year-to-date growth average to 5%, below the government’s 5.5%-6.5% target.

“The demand and liquidity were robust with MYNLD topping the list of most actively traded stocks, although that’s to be expected with market debuts. We will have to see the next few days if MYNLD can hold the line even amidst the weak market sentiment,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

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., holds an interest in BusinessWorld through the Philippine Star Group, which it controls.–Alexandria Grace C. Magno and Arjay L. Balinbin