Waiting for a boost in the IPO market

The proposal to shorten the listing process from 90 days to 30 days is expected to better ensure investors' rights and could become a driving force to encourage more businesses to list.

The "giant" in the resort real estate industry is getting closer to the date of implementing its IPO plan. Photo : Duc Thanh

Series of new recruits heat up the market

Last weekend, the Board of Directors of Vinpearl Joint Stock Company (a subsidiary of Vingroup Corporation that owns a chain of hotel, resort, spa brands, conference centers, cuisine, 5-star golf courses and large entertainment areas in Vietnam) met and approved the registration documents for offering additional shares to the public to existing shareholders according to the offering plan approved at the General Meeting of Shareholders in mid-November 2024.

Thus, another step has been completed to bring the initial public offering (IPO) plan of the "giant" in the resort real estate industry closer to the implementation date.

According to the plan approved by shareholders, the expected offering time is not far away, in the fourth quarter of 2024 or the first quarter of 2025. Vinpearl will issue 70 million shares, equivalent to the implementation ratio of 1,000:40,673. With the offering price of VND71,350/share, Vinpearl is estimated to mobilize nearly VND5,001 billion, if successfully distributed to shareholders.

Previously, Vinpearl was very successful in its private issuance in early 2024, with a mobilized value of more than VND15,000 billion. Although the possibility of distributing 100% of the issued shares is still unknown, the attractiveness of Vinpearl shares is still supported when this enterprise completes the registration of a public company. Along with that, the plan to list shares on the stock exchange, revealed at the shareholder meeting of parent company Vingroup earlier this year, is expected to be implemented soon.

Masan Consumer Corporation (Masan Consumer) also plans to offer shares to the public at a rate of 45.1%. The company will offer 326.8 million new shares, expected to raise VND3,268 billion and increase its charter capital to over VND10,623 billion. Along with the offering plan, the transfer to HoSE listing has been approved by shareholders in advance. The newbie on HoSE could be one of the bright flames that “rekindle” the IPO market that has been cold for many years.

IPO activities in Vietnam have remained subdued since the Covid-19 pandemic, although the secondary stock market has had periods of growth and excitement. As of now, as 2024 draws to a close, the number of IPO deals carried out can still be counted on the fingers. There have been no equitization auctions of state-owned enterprises. IPO activities have only appeared in a few private enterprises, most notably the offering of 30 million shares by DNSE Securities Joint Stock Company.

Untangling policy bottlenecks

Not only is the country gearing up for big deals as notable names prepare to launch IPOs, but upcoming policy changes are also expected to encourage IPOs when coupled with listings.

Not long after the National Assembly officially approved the Law amending and supplementing a number of articles of 9 laws, including the Securities Law, the Draft amending Decree 155/2020/ND-CP detailing the implementation of a number of articles of the Securities Law is being consulted by the Ministry of Finance and the State Securities Commission, with many changes aimed at transparency and simplification of administrative procedures in the field of securities and the securities market.

In particular, with the goal of shortening the securities listing process, the drafting agency is proposing to reduce the time for organizations registering for listing to put securities (stocks, bonds) into trading in Article 111, Article 118, Decree 155/2020/ND-CP. The trading period is reduced from 90 days to 30 days from the date the stock exchange approves the listing registration. The above change aims to better ensure the rights of investors in exercising the rights to transfer securities in the organized market.

Along with that, the Draft removes the "adjusted securities registration certificate issued by the Vietnam Securities Depository and Clearing Corporation (VSDC)" in the listing/transaction registration dossiers; changes in listing/transaction registration prescribed in Articles 110, 114, 115, 116, 117, 118, 134, 135, 136 of Decree 155/2020/ND-CP.

“The listing/trading registration conditions do not require enterprises to complete the securities registration procedure at VSDC. In addition, the stock exchange's review of the listing/trading registration dossier is an independent process from the securities registration at VSDC. This revised regulation also shortens the listing/trading registration process,” the report of the drafting agency emphasized.

Essential to welcome foreign capital

In the Draft Amendment to Decree 155/2020/ND-CP, one of the major groups of contents mentioned is to open the door wider for foreign investors to access the market, especially focusing on solutions to support the process of upgrading the market from frontier to emerging. Many expected figures of foreign investment capital after Vietnam becomes an emerging market have been given by organizations. However, to realize the above figures when the stock market is actually included in the FTSE's secondary emerging market group, the big problem is the specific address where foreign investors can disburse.

Putting significant pressure on businesses and consulting organizations.

- Mr. Dang Thanh Cong, Director of Northern Investment Banking Services, KB Securities Joint Stock Company (KBSV)

We expect that the changes in the law will improve the quality of “goods” in the market, making investors more confident when investing and promoting future market development. However, this will also create significant pressure for businesses and consulting organizations to meet the conditions under the new regulations, and will increase the cost and time to prepare for initial public offerings.

As the technology industry becomes a trend attracting capital flows from investors, the lack of stocks of enterprises in this field has shown the weakness in the diversity of the commodity base in the Vietnamese stock market. Many enterprises in the investment sights of international funds no longer have foreign "room" to disburse.

In addition, according to Mr. Nguyen The Minh, Director of Analysis of Yuanta Vietnam Securities Company, when upgraded by FTSE, the capitalization scale of Vietnamese securities will be compared with other markets in the same group. If capitalization does not grow, there will be a risk of being eliminated from the emerging market group.

In Vietnam, IPO and listing are two separate processes, leading to a situation where investors, especially foreign investors, have to wait several months after purchasing shares before being able to trade. The proposal to shorten the time between IPO and listing to a maximum of 1 month is highly appreciated and could become a driving force to encourage more businesses to list.

Although administrative procedures are simpler, some requirements have been added to the Law amending and supplementing a number of articles of 9 laws, including the Securities Law. In particular, Article 18 on the dossier for registration of public offering of securities adds “a report on contributed charter capital up to the time of registration of initial public offering of shares audited by an independent auditing organization according to the regulations of the Minister of Finance”. At the same time, the responsibility also increases for all parties participating in the consultation.

According to Mr. Dang Thanh Cong, Director of Northern Investment Banking Services, KB Securities Joint Stock Company (KBSV), the new regulations create significant pressure for businesses and consulting organizations to meet the conditions under the new regulations, and will also increase costs and preparation time for initial public offerings. However, the above changes will certainly help increase transparency and standards for the primary market.

Source: https://baodautu.vn/cho-cu-hich-tren-thi-truong-ipo-d232352.html