The Securities and Exchange Commission (SEC) has approved a proposal by the Philippine Stock Exchange (PSE) to exempt giant initial public offerings (IPOs), such as the upcoming IPO of GCash owner Mynt, from the 20-percent minimum public float requirement.
“We have been able to get approval from the SEC where companies that want to offer ₱5 billion or more can actually offer less than 20 percent,” said PSE President and CEO Ramon S. Monzon at the sidelines of the PSE’s InvestPH 2025 event.
He added that, under the exemption, “They can offer 15 percent with a commitment that they will do a follow-on offering or a private placement in the next two or three years to comply with the 20-percent requirement.”
Globe Fintech Innovations Inc., or Mynt, which owns the top e-wallet GCash, has been asking for an exemption from this rule. The stock market currently has liquidity problems and may not be able to absorb GCash’s IPO if it is required to offer 20 percent of its outstanding shares.
Speaking in an interview with Bloomberg, Globe Telecom’s outgoing President and CEO Ernest Cu said that Mynt will seek a valuation of $8 billion when it goes public, possibly by year-end. This would value a 20-percent IPO at $1.6 billion.
While the fintech is gearing up for an IPO, Cu said market conditions need to be right and they’re not in a hurry to do it. In addition, he reiterated the current minimum float of 20 percent is too high and that 10 percent to 15 percent would be ideal.
This would value the IPO at $800 million to $1.2 billion—just below Monde Nissin Corp.’s $1.3-billion IPO, which is historically the biggest IPO in the Philippine stock market. However, in peso terms, this will be bigger than the ₱48.6 billion raised by Monde Nissin.
“Even at the low point of this range, an $800-million offering could be the country’s biggest ever,” noted Abacus Securities Corp.
It added that, “In our view, the listing is likely to push through even if conditions are not ideal. Investors are hungry for quality IPOs... Also, waiting too long would risk turning Mynt’s investment thesis stale... Bottom line, Mynt will have to list soon if management wants to extract the best value.”
However, Monzon said, “GCash is a different animal because, for them, it’s not a question of having a difficult time offering the 20 percent. They’re saying it’s too big for the market to absorb. So if they’re going to get an exemptive relief for a lower public float, I don’t think there will be a requirement to do a follow-on.”
He warned, though, that “in the end, you have to address the index issue because you cannot be in the index if you’re below 20 percent.”
Monzon said the exemption from the 20-percent minimum public float requirement will only be for the “transition period” while liquidity problems persist. However, he did not say how long this transition period will be.
He stressed that the PSE listens to the concerns of its stakeholders and holds regular dialogues with the SEC.
“We have what we call a PSE lane which I went out to the SEC a few months back. Basically, I told the SEC, with the liquidity problems we’re having in the market now, companies are having a hard time deciding on an IPO because of their inability or fear that they cannot meet the 20-percent public float.
“So, I said, are you okay if we reduce the requirement to 15 percent? With the condition that we will have the company do a follow-on offering or even a private placement for the next two or three years to be able to meet the five or four or three percent that they did not meet so they can still comply with the 20 percent. So I have gotten approval from the SEC on that,” Monzon recounted.
He said, “We don't advertise it because it might make the underwriters lazy, so when we talk to companies that want to do an IPO, we tell them about this.”