Big names bet on IPO frenzy in international markets

April 13, 2022 | 08:00
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Major Vietnamese conglomerates are contemplating plans to offer their shares on foreign exchanges to scale up their financial soundness and place their brand on the world stage – a process which continues to be easier said than done.
Big names bet on IPO frenzy in international markets
Big names bet on IPO frenzy in international markets

Vingroup’s automobile arm VinFast has submitted its application for initial public offering (IPO) registration to the US Securities Exchange Commission, but has yet to make a final decision on how much money it will put forth.

The country’s electric vehicle (EV) manufacturer has been working with advisors on a planned listing in the US for later this year.

Bloomberg estimated that the VinFast IPO would raise almost $2 billion, which would make it the largest ever by a Vietnamese firm, surpassing its real estate developer sister Vinhomes JSC’s $1.4 billion first-time share sale in 2018. If the company is successful, it will become one of the few Vietnamese firms to be listed on the New York Stock Exchange.

The move came as the company prepares to construct an EV manufacturing facility in North Carolina as early as 2024. An estimated $6 billion investment is being made in the first phase of a proposed complex in the US.

Late last month, VinFast reportedly considered a financing round aimed at raising around $500 million to $1 billion in preparation for a prospective IPO in the US.

Vingroup vice chairwoman Le Thi Thu Thuy shared in an interview last November that a successful IPO could bolster the carmaker’s market value of around $25-60 billion.

Kent Wong, partner and head of Banking and Capital Markets at VCI Legal, told VIR, “It’s great that VinFast has chosen the traditional IPO route and not the special purpose acquisition company (SPAC). Their plans are very ambitious, and the timing is right, given high oil prices and consumer trends.”

Some concerns, Wong said, would be generating enough at the top line. “Moreover, fierce competition with established players such as Tesla, General Motors, and other EV start-ups is on the rise,” he stated.

Masan, another major Vietnamese conglomerate, has also signalled its intention to tap into the global funding source via an overseas listing for its consumer retail business The CrownX in 2023-2024 after obtaining an additional $350 million from a consortium of investors.

“The group comprises world-renowned private equity firms including TPG, Platinum Orchid, a fully owned subsidiary of the Abu Dhabi Investment Authority, and Temasek-controlled SeaTown Master Fund,” a representative from Masan said.

The CrownX, Vietnam’s largest retail corporation, was founded by the merging of Vingroup’s retail divisions and high-tech farms with Masan’s food and beverage unit in 2019.

A post-investment value of $8.2 billion, or $105 a share, is estimated by Masan to be appropriate for The CrownX. The consumer retail segment will be controlled by Masan, which will own 81.4 per cent of the corporation.

Last December, Vietnam’s tech behemoth VNG was also exploring extra capital ahead of a prospective US listing. The unicorn startup is trying to fund $200-300 million from both new and current backers.

VNG was mulling over an overseas listing in the US via the SPAC route to tap into the huge chunks of foreign cash.

In the same boat, after raising $258 million in its Series E financing round led by AIA last November, e-commerce group Tiki said its US IPO concept could be realised sooner than expected for 2025. However, uncertainty surrounds whether or not a blank-check firm merger will lead to an IPO. Tiki CEO Tran Ngoc Thai Son recently revealed that the company’s worth now stands at around $1 billion.

Foreign investment in Vietnam’s fledgling IT industry may be facilitated by the success of a significant Vietnamese firm like Tiki in the United States.

Bamboo Airways, an FLC Group affiliate, last year disclosed that it plans to raise money via an IPO in the US in the near future. Notwithstanding, alleged market manipulation claims involving FLC’s former chairman could complicate Bamboo Airways’ overseas listing situation.

Apart from US listings, the Singapore Stock Exchange (SGX) is also at the forefront of exchanges worldwide and draws both regional and international issuers thanks to its world-class connectivity, which allows traders more access and a broader pool of capital.

VinaCapital, a Ho Chi Minh City-based asset management fund, has reportedly collaborated with advisors on a potential $183 million IPO via the SPAC method on the SGX.

By Celine Luu

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