West Zone concessionaire Maynilad Water Services Inc. has raised the likelihood of another reset in its P45.78 billion initial public offering (IPO, according to a market analyst.
Following the latest Maynilad advisory of an IPO pushback to November from a previously rescheduled October, a third time is not remote, Aniceto Pangan, trader at Diversified Securities, said on Sunday.
“If they did it 2x, then the possibility of moving (again) is now higher,” Pangan added.
Market participants earlier said the rescheduling boils down to an optimal pricing of the share sale for the company, which billionaire Manny V. Pangilinan controls under the First Pacific Group.
Maynilad informed the Philippine Dealing and Exchange Corp. on Thursday of last week that the adjustment to the timetable is necessary for investor education.
“Following the accommodation of cornerstone investors for the IPO, the corporation is extending the IPO timetable to allow more time for investor education, ensuring that investors gain a deeper understanding of the corporation and its business model for more informed investment decisions,” Maynilad said.
“The corporation now targets a listing date of not later than 7 November 2025 (from the previous target listing date of 31 October 2025),” it added.
Maynilad’s decision comes as the market trades at one of its lowest valuations in history, with a 10.39x price-to-earnings (PE) ratio, below its five-year historical average of 17.3x and the regional average of 18.2x.
The water concessionaire is offering to the public a total of 2.29 billion shares, comprising 1.93 billion primary shares and 354.7 million secondary shares to be provided by Maynilad Water Holding Company Inc. (MWHCI), at an offer price of up to P20 per share.
Of the primary shares, Maynilad stated that 1.66 billion shares will comprise the firm share offer, while an additional 249.05 million primary shares have been allocated to cover the overallotment option, also known as a greenshoe option.
The company, at the same time, stated that it has also set aside an additional 24.9 million shares for sale to First Pacific Co., Ltd.
If all shares are fully subscribed, Maynilad will sell as much as 30 percent of its ownership in the company.
The proceeds of the offer will be used to partially fund the company’s P68.46 billion in capital expenditures for the year, focusing on three central pillars: water, wastewater, and customer service & information system projects.
The program includes the acquisition of lots preparatory to the construction of a 300 million liters per day (MLD) water treatment plant in Teresa, Rizal, as well as installing a 46-kilometer conveyance to coincide with the completion of the MWSS’ New Centennial Water Source-Kaliwa Dam, the IPO’s prospectus showed.
“It also covers projects relating to Angat and Ipo for the rehabilitation and refurbishment of the appurtenances of the common purpose facilities to improve raw water conveyance efficiency and increase the reliability of the Bigte-Novaliches Aqueducts,” Maynilad said.
The company also plans to expand its water supply infrastructure and operations to ensure a 24-hour water availability at a minimum pressure of 16 psi, expand water coverage, enhance reliability, flexibility, and adaptation to climate change, and acquire right-of-way (ROW) and lots for water facilities.
BPI Capital Corp. serves as the domestic lead underwriter. At the same time, The Hongkong and Shanghai Banking Corporation Limited, Morgan Stanley Asia (Singapore) Pte., and UBS AG, Singapore Branch will act as international underwriters.
Maynilad has recently secured approval for a 10-year extension of its concession, valid up to January 21, 2047.
