Balai Ni Fruitas IPO is TODAY
Balai Ni Fruitas [BALAI 0.70] [link] is the latest PSE experiment of food kiosk entrepreneur, Lester Yu, and it hits the open market this morning at 9:30 AM when the IPO shares get listed and are available for active trading.
Fruitas Holdings [FRUIT 1.07], BALAI’s parent company, is selling 325 million BALAI primary shares, and 50 million BALAI secondary shares plus 37.5 million additional secondary shares as part of an over-allotment option.
After the transaction, the public will own approximately 27.59% of BALAI, with the remainder held by FRUIT.
As I mentioned in a previous write-up, there has been very little chatter about BALAI through this whole process, either at the investor/forum level, or at the bank and analyst level in the media.
That said, I still had 25 readers respond to my BALAI IPO Allocation Poll, who in total reported receiving P1 million worth of BALAI IPO stock after having submitted an aggregate subscription request for P4 million in BALAI IPO shares.
Of the usual broker suspects, First Metro Securities, a subsidiary of the issue manager and underwriter, had the lowest allocation rate at 15%. COL Financial and AAA Equities managed to reach a 65% allocation rate, while PSE EASy took the crown with an allocation rate of 99%.
MB BOTTOM-LINE
BALAI has a stabilization fund, so any IPO speculators that don’t get the pop that they’re looking for will possibly have the benefit of the stab fund’s deep pockets to offload shares to should “push come to shove”.
Based on the BALAI Allocation Poll results, it looks like this one is oversubscribed with respect to the broker tranche of IPO shares, but not oversubscribed for the PSE EASy tranche.
I don’t have any information on how things went with the institutional offer.
To me, the PSE EASy tranche is the true indicator of retail interest, and from the data I received, it did not look as though demand for BALAI IPO stock exceeded demand.
I’m willing to consider this a partial over-subscription (broker tranche only), but I’ll update as information becomes available on the institutional tranche. As for how BALAI will do today, that’s something of an open question.
Investors with FRUIT experience might be a little gun-shy about another Lester Yu IPO, given the lifetime performance of FRUIT’s stock price relative to its IPO price (-36%).
I’ve praised Mr. Yu several times on this newsletter for his agile moves at the onset of the COVID-19 pandemic, and his quick pivot towards supporting his kiosk-based business with an online platform capable of onboarding new brands quickly and reaching new customers in ways that helped mitigate movement restrictions that were crippling the in-store sales of FRUIT’s peers.
Is the market interested in a smaller version of FRUIT?
Have the issues at the FRUIT level that have prevented the stock from reflecting its initial valuation on their way to being resolved, or do those same issues exist in the minds of investors down at the BALAI level as well?
Grab some popcorn, because we’re about to find out.
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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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