Stock Commentary

Citicore Renewable Energy sets IPO price at 30% discount

Merkado Barkada
Citicore Renewable Energy sets IPO price at 30% discount

Citicore Renewable Energy [CREC 2.70 pre-IPO] [link] advised the exchange that it has priced its IPO at P2.70/share, which is a 30% discount to the P3.88/share placeholder maximum price from its preliminary prospectus. This brings the maximum value of the IPO transaction to CREC’s shareholders down from P6.9 billion to P4.8 billion. The ~268 million shares in the overallotment option are secondary, so the proceeds of their sale will go to the selling shareholders and not to CREC.

MB BOTTOM-LINE: The initial maximum value of the IPO from the preliminary prospectus is not important; it’s basically just a placeholder that they use to build out the offer and loosely ballpark an enterprise valuation. The real number – the one that they go ahead with at the IPO – is always going to come as a result of the underwriters working the phones with institutional investors and potential anchor investors. They don’t just pick a nice number out of the air that they think will sell the shares and give investors some upside. This is a number that will clear the board and sell all the shares. Full steam ahead for the May 27 offer start.

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.

vuukle comment



  • Latest
Are you sure you want to log out?

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

Get Updated:

Signup for the News Round now

or sign in with