AllDay IPO worth up to P5.8 billion approved by SEC

The Villar Family’s application to sell shares of AllDay [ALLDY 0.80 pre-IPO], its grocery store arm, to the public was approved by the SEC. This approval is the second-to-last step in ALLDY’s path to the market, where the Villars hope to raise nearly P5.8 billion from investors to pay off P4.1 billion in high-interest debt (plus a little bit for capex and working capital).

The PSE’s approval is the last step before ALLDY can start conducting its offer period, which is tentatively scheduled for October 15th to 25th, with its IPO tentatively scheduled for November 3rd. ALLDY has 33 stores now, as of the end of H1/21, and hopes to have 45 by the end of next year, and 100 by the end of 2026.

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ALLDY specifically omitted the Villar Family’s convenience store brand from its offering, and restricted its concept to in-person grocery stores and “dark stores” that facilitate online shopping through warehouses. In this way, Puregold [PGOLD 42.95 3.74%] is probably a better comparison to ALLDY’s strategy, but even that is not directly on-point due to PGOLD’s interest in the membership-model S&R concept, and its relatively small “dark store” footprint. It’s going to be interesting to see how the market values this Villar offering.

It clearly wasn’t too impressed with the price of their AllHome [HOME 8.88 unch] IPO in 2019, since that stock has not traded over its offer price since just a month or so after the stability fund ran out.

HOME has seen a very healthy uptick in its stock price over the past year, but it’s still sitting 23% lower than its IPO price of P11.50. I bring this up because in the world of groceries and convenience stores, where profits are usually quite thin, the price of the underlying stock will have a huge impact on the potential growth of the stock price. People who bought HOME’s IPO in 2019 have really never known profit, and have (at times) been sitting on 50% losses.

That isn’t to say that HOME is a bad business, but it is to say that the market felt as though the IPO price was too high. Will the Villars use a similar strategy in pricing ALLDY? We’ll have to wait and find out!

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