'Oversubscribed' AllDay shares hit price ceiling in stock market debut

MANILA, Philippines — Shares in Villar-owned supermarket chain AllDay Marts Inc. hit the surge limit on Wednesday to cap its stock market debut with a bang, thanks to strong demand from investors.

AllDay stocks hit the daily price ceiling of 50% to close at P0.90 apiece on its listing day, outperforming the main index’s 1.11% gain. The company raised as much as P4.52 billion during the offer.

Demand was so strong for AllDay’s initial public offering that there were not enough shares for everyone. PNB Capital, the company’s underwriter, had said AllDay’s IPO was 1.6 times oversubscribed after investors placed a total order of 1.11 billion shares when only 685.7 million shares were up for sale.

As a result, PNB capital had to refund the excess orders that had been paid already mostly by retail investors.

“When we priced the IPO, we did so with a mind to help maximize long-term value for our new institutional and retail investors,” Manuel Villar Jr. AllDay, company chairman, said in a statement.

Luis Limlingan, head of sales at Manila-based brokerage firm Regina Capital, said investors swarmed AllDay’s IPO after the company cut its offer price to P0.60 each from P0.80 previously. But Limlingan believes the hefty 25% discount was not the only driver of the rally.

“The overwhelming demand and benefits from economic recovery positively affected the issue’s price on its market debut,” he said in a text message. 

The next question would be how long can AllDay sustain the uptrend. Aniceto Pangan, equity trader at Diversified Securities Inc., said AllDay would likely follow the track record of MerryMart Consumer Corp., the grocery operator owned by businessman Edgar “Injap” Sia, as both companies went public “under favorable market condition.”

As it is, the successful fundraising activity came after panic-buying triggered by coronavirus lockdowns provided some tailwind to the company. In 2020, AllDay reported a net profit of P220 million, up by almost fourfold compared to the preceding year.

The company intends to use an estimated 77.5% of proceeds to reduce its debt stock amounting to P3.3 billion, which was used to bankroll the construction of its 33 stores.

The remaining amount will be used for store network expansion. AllDay is hoping to have a total of 45 stores by 2022 and 100 stores by the end of 2026.