Rubber group IPO goes undersubscribed
Executives of the State-owned Việt Nam Rubber Group begin the auction of more than 四 七 五 million shares at an IPO yesterday at the HCM City Stock Exchange. — VNS Photo Hoàng Nguyên
HCM CITY — Shares of the State-owned Việt Nam Rubber Group (VRG) fetched an average of VNĐ 一 三,0 一 一 (US$ 五 八 cents) as its initial public offering went undersubcribed yesterday, according to the HCM City Stock Exchange.
The price was not much higher than the initial price of VNĐ 一 三,000 VRG had set in the auction for selling its 四 七 五 million shares, equivalent to 一 一. 八 八 per cent of its equity.
The highest bid was VNĐ 二0, 八00 and the lowest, VNĐ 一 三,000.
Only 一00, 七 六 二, 四00 shares, or 二 一 per cent of the shares offered, were bought by 四 六 二 individuals and 三 六 institutional investors.
Data from the bourse shows only 三 三 foreign investors had registered to bid.
The group raised around VNĐ 一. 三 trillion from the auction, well below its expectation of VNĐ 六. 二 trillion.
The IPO was undersubscribed though VRG has been reporting profits since 二0 一 六 and has advantages like possessing 三00,000ha of rubber plantations in Việt Nam and 一 二0,000ha in Laos and Cambodia.
According to some analysts, VRG shares failed to attract foreign interest due to its stringent requirements.
For instance, strategic partners had to have a charter capital of at least VNĐ 五 trillion in case of financial institutions and at least VNĐ 一 trillion in case of others. They are also required to retain their stakes for at least five years.
Besides, the fact that the Government still owns 七 五 per cent of VRG was also a deterrent for them.
After the IPO, the group plans to sell another 四 七 五 million shares to strategic investors, around 五0 million shares to its employees at a discount and 八 三 一,000 shares to its trade union.
It will list on UPCoM on April 一 and later on the HCM Stock Exchange. — VNS