AllDay Marts, Inc. is anticipated to make a strong market debut as it stands to benefit from the recovery in consumer demand, given the upcoming holidays as well as the national elections, on top of its already well-received initial offer period.
The Villar-led firm conducted its offer period last week, which saw “overwhelming demand” from small investors. The company set its offer price to 60 centavos each, 25% lower than the 80-centavo price ceiling it set.
“The discounted IPO (initial public offering) price could provide potential upside opportunities amid further measures to reopen the economy amid the significant reduction in new COVID-19 (coronavirus disease 2019) cases,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message on Monday, adding that the progress in the country’s vaccination program is also a factor.
“The price action would also be a function of the country’s recovery story as may be enhanced by the upcoming Christmas season and election spending, both of which could boost consumer spending, which accounts for about 70% of the economy and boost the sales and earnings of retailers as well,” he added.
Mr. Ricafort said retailers could benefit from the resumption of in-person classes, as well as the recovery in the tourism industry.
Pent-up demand from investors not being able to get an allocation from AllDay’s offer period could also affect issue’s price on its listing day.
“Investors who haven’t been allocated enough shares during the offer period may try to buy AllDay shares in the open market instead,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a separate Viber message last week.
Mr. Pangan said investors should also monitor if the issue will reflect the benchmark Philippine Stock Exchange index’ downtrend last week.
“We’ll have to observe how traders participate in the stock’s listing day on [Wednesday], given the current market conditions especially after the index dropped over 3% [last] week,” Mr. Pangan said.
Week on week, the benchmark Philippine Stock Exchange index lost 234.91 points to close at 7,054.70 on Friday, down by 3.22% from its 7,289.61 finish on Oct. 22.
Analysts said investor sentiment was dampened after the government kept Metro Manila under Alert Level 3 instead of easing restrictions to allow for a further reopening of the economy.
AllDay will make its market debut on Nov. 3 under the ticker symbol “ALLDY.” The Villar-led grocery operator offered 6.857 billion shares with an overallotment option of only up to 685.71 million shares for 60 centavos apiece.
However, the offer was said to have received an oversubscription of nearly 1.11 billion common shares, prompting a refund process for some investors who were not given a share allocation.
“The overwhelming demand from the local small investors (LSIs) who participated in [the company’s] initial public offering and subscribed to the company’s common shares resulted in the total demand for the offer shares exceeding the maximum allocation of 685,715,000 common shares with an oversubscription of 1,107,444,000 common shares (or 1.62x),” PNB Capital and Investment Corp. said in a letter to the exchange on Oct. 28.
“Due to the oversubscription, a total of 1,781 investors will be receiving funds for the excess amount subscribed and paid for,” it added.
AllDay conducted the P4.53-billion IPO for debt repayment, capital expenditure, and store network expansion. According to its final prospectus dated Oct. 12, the company aims to retire debt amounting to P3.149 billion, which was said to be incurred to fund the capital expenditures and working capital of AllDay’s existing 33 stores.
“We believe that pursuing this strategy will increase the overall shareholder value of the company as this will decrease our financing cost by as much as P206.39 million per annum,” the company said.
“Any balance of the net proceeds will allow us to partly fund our store network expansion,” it added.
The company aims to expand to 45 stores from its current 33 stores by next year. By the end of 2026, AllDay aims to have a store network with 100 branches.
AllDay’s 33 stores are located across 25 cities and municipalities in the country. The company has an e-commerce platform to reach more consumers, which is also backed by its “dark store concept” servicing as “last-mile fulfillment centers for www.allday.com.ph.” — K.C.G. Valmonte