West Zone concessionaire Maynilad Water Services Inc. successfully debuted on the Philippine Stock Exchange after its ₱34.33 billion initial public offering (IPO) was heavily favored by investors, ending 2.7 times oversubscribed.

In a briefing before the listing, Maynilad Chief Finance Officer Ricardo F. de los Reyes said cornerstone investors took 61.1 percent of the 2.29 billion IPO shares, which included the upsize and overallotment options.

Asian investors accounted for 53.6 percent of the IPO allocation, followed by local investors at 29.6 percent, European investors at 14.7 percent, and United States (US) investors at one percent.

Maynilad’s stock opened at ₱15, matching its IPO price. Trading data from the PSE showed the stock closed slightly lower at ₱14.98, a 0.13 percent decline for the day.

Maynilad President and Chief Executive Officer Ramoncito S. Fernandez stated the company pushed ahead with the IPO despite challenging market conditions.

“Aside from fulfilling the requirements of the legislative franchise, we believe Maynilad has strong fundamentals. And we deliver essential services and we have predictable cash flows,” Fernandez said.

He noted that the timing was right to move forward, particularly with the involvement of lead cornerstone investors International Finance Corp. (IFC) and Asian Development Bank (ADB).

“The presence of ADB and IFC into this IPO helped us in the marketing effort... And it attracted a lot more investors. It was good because we've attracted significant strong interest from both local and international investors,” Fernandez explained.

“And they have given us very positive feedback on the company's performance, the CapEx plans, and also our dividend policy. And, the result is, the IPO is over two times oversubscribed. We were compelled to exercise the upsize option,” he added.

Unicapital Securities Research Analyst Peter Louiss Garnace said Maynilad’s successful debut “is an affirmation of investor confidence in the local capital markets.”

He said the utility had a “defensive play,” given the healthy demand from both institutional and retail investors.

“Despite the economic slowdown in the third quarter, we continue to see strong earnings performance for Maynilad, underpinned by higher implemented tariffs and resilient demand, as water is an essential good or a staple commodity," Garnace said.

He also suggested the listing could have broader market implications, believing the success of Maynilad’s IPO “could act as a catalyst, potentially unlocking a pipeline of companies awaiting for more favorable market conditions.”

During the listing ceremony, President Marcos welcomed the listing, saying it “signals what I have been telling the world: that the Philippines is open, ready, and eager to do business with you." He also called the listing "a sign of confidence in our markets and in our people.”

“This listing invites more investors and voices into the journey of managing a precious resource. With its Initial Public Offering, Maynilad welcomes scrutiny and accountability,” President Marcos said.

“And, in doing so, Maynilad can expand our capital markets and our shared belief that private enterprise can serve the public good,” the chief executive added.

Maynilad Chairman Manuel V. Pangilinan, meanwhile, noted the utility’s dramatic turnaround since 2007, as connections grew from 699,000 to 1,651,000.

He added that billed volume increased from 262 million cubic meters (mcm) to 412 mcm this year, with projections to exceed 500 mcm by year-end, and that Non-Revenue Water (NRW) was cut from 69 percent to the current 35 percent.

“So from an ailing utility, Maynilad is now a world-class water and wastewater service provider,” Pangilinan said.

Fernandez said the IPO “marks the beginning of a new chapter for Maynilad,” allowing it to pursue long-term expansion plans for its water and wastewater businesses.

He sees the investment as a sign of confidence in its vision to strengthen its position as a pure-play sustainability company.

Maynilad offered 1.66 billion common shares to the public and 24.9 million shares to First Pacific Co. Ltd., with an overallotment option of up to 249.05 million primary common shares. The offering also included an upsize option of up to 354.7 million secondary common shares from shareholder Maynilad Water Holding Co., Inc.

ADB Philippines Country Director Andrew Jeffries stated, “This investment highlights our commitment to helping provide clean, accessible, and reliable water and safe sanitation services, to millions of Filipino households, commercial and institutional users.”

Amena Arief, Country Manager for IFC Philippines, said the IFC is “proud to participate in Maynilad’s IPO to help the Company expand and enhance its wastewater services in the coming years,” noting that the investment also underscores the IFC’s role in strengthening capital market development in the Philippines.

International cornerstone investors included: abrdn Malaysia Sdn. Bhd; The United Kingdom Foreign, Commonwealth, and Development Office; Maven Investment Partners Ltd – Hong Kong Branch; Maybank Asset Management Singapore Pte. Ltd.; Robeco Switzerland Ltd.; and QRT Master Fund SPC – Torus Fund SP.

Domestic cornerstone investors were: BPI Asset Management and Trust Corp., Metropolitan Bank & Trust Co. – Trust Banking Group, BDO Capital & Investment Corp., and Security Bank Corp. – Trust and Asset Management Group.