Cash in or withdraw? Avoiding a clash with GCash’s mega-IPO

Experts say timing is critical to a successful initial public offering (IPO).

- RICHMOND MERCURIO

With GCash announcing that its blockbuster IPO is already on the way, will other aspirants rethink their listing plans this year to avoid a clash with what could potentially be the biggest IPO in the country?

That could be a possibility, if you ask some of the country’s top market experts.

“For smaller IPOs, I think it will be a timing risk and they may delay their listing after the GCash IPO due to limited capital” Franco Fernandez, equity research analyst at DragonFi Securities Inc., said.

“GCash has been a highly anticipated IPO since it was first teased and is highly likely to pull capital away from other listings if they happen close to each other,” he said.

China Bank Capital Corp. managing director Juan Paolo Colet said that as with any massive IPO, particularly one of such magnitude as GCash is expected to be, there is a potential risk to near-term liquidity for other equity offerings.

Colet noted that the risk is more pronounced for smaller companies that rely primarily on domestic investors, who may instead concentrate their attention and capital on GCash.

“Issuers that are sensitive to this dynamic would be well advised to calibrate the timing of their market debut to avoid clustering too closely with the GCash mega-IPO," he said.