Investors snap up Wilcon Depot shares

INVESTORS lapped up the shares of Wilcon Depot, Inc., with the country’s first initial public offering (IPO) this year witnessing an oversubscription of 3.7 times, according to issue manager First Metro Investment Corp. (FMIC).

In a statement, FMIC Executive VicePresident Justino Juan R. Ocampo said the maiden share sale of the home improvement and construction supplies retailer drew a wide range of investors ranging from retail individuals to investment and trust funds, pension and retirement funds, banks, insurance companies and corporations.

“The purely domestic offering was also participated in by foreign funds keen to capitalize on the country’s healthy economic growth outlook,” Mr. Ocampo was quoted in the statement as saying.

The P7- billion offer was already more than three times oversubscribed at pricing date, while the portion set aside for trading participants was more than six times oversubscribed at the close of the offer period last Friday.

“When you combine that with the robust prospects of the Philippine economy, the ever-growing housing demand, and positive outlook for the construction and retail sectors, we are confident that Wilcon Depot’s shares will perform very well in the Philippine Stock Exchange,” Mr. Ocampo said.

Wilcon sold 1.39 billion primary shares at P5.05 per share, giving the company a market capitalization of more than P20 billion after listing. The firm will debut on the Main Board of the Philippine Stock Exchange (PSE) on Friday.

Wilcon Chairman William T. Belo said the strong demand is “a testament to the confidence” of the investors in its expansion plans.

Proceeds from the IPO will fund store expansion, repayment of existing debt obligations and for general corporate purposes.

Wilcon is banking on the continued expansion of its store network to sustain double- digit growth in sales and earnings. In the first nine months of 2016, it booked a 10% year-on-year increase in net sales to P11.73 billion and netted 50% more or P483 million.

Aside from FMIC, BDO Capital & Investment Corp. was joint lead underwriter of the issue. RCBC Capital Investment Corp. acted as co- lead underwriter and Penta Capital Investment Corp. was participating underwriter. —