Monde Nissin’s Record ₱48.6 Billion IPO Causes a Craze

Monde Nissin Corp’s initial public offering (IPO), which is the Philippines’ biggest IPO in history, is causing a significant amount of commotion within the Philippine stock market.

According to investors, the IPO priced at ₱48.6 billion is forcing them to reallocate their funds from other holdings and even sell blue-chip stocks to secure Monde Nissin’s shares that are set to debut on June 1.

Compared to the start of the year, the average volume on the Philippine stock exchange index (PSEi) is up by almost one-third since the IPO was filed in March.

Prominent overseas firms including Singapore-based state investment fund GIC and Hong Kong’s AIA Group have also taken stakes in Monde Nissin. The IPO is attracting foreign investors despite the country’s continued struggle against the global pandemic.

“The switch started as early as when the IPO was approved and it’s partly driving the market weakness and foreign fund withdrawals,” AB Capital & Investment Corp chief investment officer Gerard Abad.

Monde Nissin is valued at ₱242.6 billion with ₱13.50/share IPO price making it the 14th biggest company listed on the Philippine Stock Exchange.

The company’s return-on-equity (ROE) is attractive for most investors, which was at 31.3% last year. Much better than its competitors Universal Robina Corp.’s 11.8% and San Miguel Food’s 13.9%. However, its estimated price-to-earnings (P/E) ratios can be cause for hesitation.

AP Securities analyst Andrei Soriano recommends buying the stock below ₱13.20/share as he forecasts Monde Nissin’s P/E at 27.1 times compared against Universal Robina’s 25.6 times.

Source: The Business Times