At least 10 companies are seeking to tap the stock exchange next year, and they have approached Sy-led BDO Capital & Investment Corp. for assistance in raising funds for growth, expansion, or new projects.
BDO Capital & Investment Corp. president Eduardo Francisco revealed this during an interview at the sidelines of the EJAP-AboitizPower Renewable Energy Forum on Friday.
He said that improving market conditions creates a more favorable environment for initial public offerings (IPOs).
“There are 10 companies on my list, but I can’t disclose them yet. They vary across sectors like real estate, consumer goods, retail and even food,” Francisco said.
Falling interest rates
Francisco explained that falling interest rates are making the equity market more attractive. If government bond rates drop further, he said equity investments could become more appealing, which could drive even more IPO activities.
While many companies are preparing for potential IPOs next year, Francisco noted that none are from the renewable energy sector.
He explained that smaller renewable energy projects often rely on bank loans or project financing rather than IPOs, which are typically reserved for larger players like ACEN Corp. or Alternergy Holdings Corp.
Smaller companies, he added, are less likely to go public soon, as they usually need fully operational projects before considering an IPO.
“The capital structure requires the projects to be in place first. Once they start operating, that’s when they can consider launching an IPO,” Francisco said.
To date, the Philippine Stock Exchange has completed three IPOs, halfway to its target of six.
The completed IPOs include OceanaGold Philippines, Citicore Renewable Energy Corp. and NexGen Energy Corp.