Top Line slashes IPO valuation amid investors’ talk

Top Line Business Development Corp. (Top Line) has reduced its indicative initial public offering (IPO) price from up to P0.78 per share to P0.38 per share—cutting its valuation in response to discussions with potential institutional investors.

The Cebu-based fuel retailer said on Wednesday that it will now offer up to 2.15 billion primary common shares and an overallotment option of 214.84 million secondary shares, potentially raising approximately P900 million at the new offer price. If the overallotment option is fully exercised, public ownership will increase to about 22 percent.

Previously, Top Line intended to offer up to 3.68 billion primary common shares, along with an over-allotment option of up to 368.31 million secondary shares.

The IPO was initially projected to raise P2.75 billion in net proceeds, based on the original indicative price of up to P0.78 per share, pending a book-building process.

As as result of the revised structure, Top Line's minimum public float will be lowered to 20 percent from 30 percent.

Top Line Chairman, President, and CEO Erik Lim explained that the adjustments reflect the company’s evolving capital needs while ensuring regulatory compliance. 

“We appreciate the interest shown by potential investors in supporting our expansion and growth. As such, we’ve adjusted our offer structure to reflect our adjusted capital requirements and, at the same time, maintain regulatory compliance,” Lim said.

For the company’s underwriter, the revised structure will ramp up the offering’s appeal to investors. 

“We believe that the revised offer structure makes this IPO an attractive investment opportunity for investors seeking strong value and growth, given the company’s compounded annual revenue growth rate of more than 49 percent from 2021 to 2023—outpacing the growth of constituent companies of the Philippine Stock Exchange index,” said Investment & Capital Corp. of the Philippines, Top Line’s issue manager, joint lead underwriter, and joint bookrunner.

Originally scheduled for 27 November to 3 December with a listing initially planned for 13 December 2024, Top Line’s debut on the Philippine Stock Exchange will be moved to the second quarter, pending regulatory approvals.