Haus Talk IPO is TODAY!
The first IPO of 2022 is here, and it’s HTI: an affordable housing real estate development firm owned by the Madlambayan Family of Pampanga.
The offer consists of 500 million common shares, all primary, priced at P1.50/share. Haus Talk [HTI 1.50] will use the proceeds for land acquisition (64%), project development (30%), with the remainder for “general corporate purposes”.
The underwriter is Investment and Capital Corporation of the Philippines (ICCP).
There’s no stability fund. There are no confirmed reports of any tranche of the IPO offering being “oversubscribed”, though ICCP and HTI did say there was strong demand for the institutional tranche.
The informal MB poll on HTI IPO allocations showed that 100% of the fourteen reporting Barkadans that submitted subscription requests received their full allocation, though there are some anecdotal reports of partial allocations from COL Financial [COL 4.14] users.
MB BOTTOM-LINE
HTI is the first of the low-income housing developers that will IPO on the PSE’s SME board (small and medium enterprises) this year, and regardless of the issuance, I’m excited to get some more diversification in the investment options available in the real estate sector, especially for the low-income housing segment which has been white-hot for a while, even through the pandemic.
Please don’t take that as an endorsement for HTI specifically, it’s intended as an opinion on the sector more generally, to give an idea as to the context of the offering.
I like that the offer is 100% primary, meaning that the Madlambayan Family is not cashing out by selling any of their stake to the public, as this both maximizes the proceeds available to the company for uses that can generate greater income in the future, and serves as a vote of confidence from the family that continuing to own as much of the company as possible is still in their best interests.
That was my biggest critique of the Medilines Distributors [MEDIC 1.20 0.84%] IPO at the time, that Virgilio Villar was selling a considerable chunk of his stake in the IPO (32% of the shares on sale were secondary, from Villar); it didn’t help matters that of the money that actually went to the company, only 27% of it would go towards uses that could grow income over time. The MEDIC IPO reeked of a cash-out.
This HTI IPO looks and feels like an authentic attempt by a small company to hit the “turbo” button on its growth by tapping the public equity market for a cash infusion.
Still, the same question that confronts every IPO still remains: what will happen on the first day of trading?
Will the price discovery that occurs as a result of all the frantic buying and selling validate the offer price and provide immediate returns to IPO buyers, or will holders be in for a white-knuckle situation if the price dips below the offer knowing that there’s no stability fund to cushion the fall?
That’s the drama that will have me hitting F5 like a hundred times in the first few minutes of trading this morning.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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