A few companies in Hong Kong, India and Singapore are drawing attention with their seemingly adventurous initial public offering (IPO) plans in an inhospitable global market, but their fundraising mission is less foolhardy than it looks.
Interior designer LC Group and construction firm LEAP Holdings are meeting investors in Hong Kong to pitch their offerings. In India, logistics company Navkar Corp is marketing its IPO, while Prabhat Dairy is launching its share sale this week. In Singapore, autoparts maker Jiangxi Jiangling Chassis Co (江西江鈴底盤) is drawing up plans to tap the equity market.
The deals are small — up to US$241 million in total. However, their compactness means bankers need fewer investors to fill order books. Smaller offerings also tend to attract retail investors.
However, what about the bigger deals? On the radar are a series of sizable offerings including those of China Reinsurance (Group) Corp (中再集團), China Huarong Asset Management Corp (中國華融資產管理) and Taikang Life Insurance Co (泰康人壽保險).
They would need a big group of institutional investors and an army of retail investors to help take their billion-dollar deals over the finish-line. The companies are slated to launch their IPOs in the second half of the year.
Concerns about a prolonged Chinese economic slowdown and fears over volatile shares could force some companies to delay their deals, stunting the run of IPOs this year.
So far this year, IPO issuance in the Asia-Pacific has jumped nearly 25 percent from a year earlier to US$44.5 billion. The real test — bankers and analysts say — will be when and if sizeable offerings move ahead in coming weeks.
“A lot of deals will need to be put on hold under these market circumstances,” Hong Kong-based Phillip Securities Group (輝立證券) corporate finance officer Jasper Chan (陳英傑) said. “Markets won’t recover that soon, not this month. Next year it will get better, but this year I think there’s a lot of uncertainty around the world. It’s not easy to forecast what’s coming,” he said.
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Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
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