Some speed up, others are cautious.

Raising capital on the stock market remains an effective channel for many businesses. However, real estate companies are still cautious due to unfavorable stock market performance.

Raising capital through the stock market: Some are accelerating, others are being cautious.

Raising capital on the stock market remains an effective channel for many businesses. However, real estate companies are still cautious due to unfavorable stock market performance.

In the securities industry, more than a dozen companies completed capital increases in 2024. Photo: Duc Thanh

Real estate groups are postponing plans, waiting for the right time.

For the second consecutive year, the share issuance plan of the Development Investment Construction Corporation (DIC Corp, ticker DIG) has been abandoned. This time, DIC Corp intended to offer an additional 200 million shares to existing shareholders. With an issue price of VND 15,000 per share, DIC Corp could raise a maximum of VND 3,000 billion, which was planned to be allocated to the Cap Saint Jacques Complex Project (VND 1,135 billion), the Vi Thanh Commercial and Residential Area Project (VND 1,426 billion), and bond repayment obligations.

The decision by DIC Corp's Board of Directors came less than two weeks after the State Securities Commission granted the registration certificate for the share offering. DIC Corp had even published a prospectus to its shareholders. "The suspension of the issuance aims to protect the interests of shareholders in unfavorable stock market conditions," the Board of Directors' resolution stated.

Reportedly, DIC Corp's share price is at its lowest level since April 2023. Instead of raising capital, DIC Corp's cash flow is expected to come from asset sales. DIC Corp has decided to sell up to 16.2 million DC4 shares of DIC Holdings Construction Joint Stock Company to restructure its investment portfolio, which is expected to generate over 200 billion VND.

Furthermore, according to information from the company in mid-December 2024, DIC Corp plans to sell 599 land plots in the Vi Thanh Commercial Residential Area, all of which have completed legal procedures including land clearance, issuance of land use right certificates, and fulfillment of financial obligations.

DIC Corp is not the only case of a company halting its capital increase plan. Notably, these cases are all in the real estate sector. In September 2024, Hai Phat Investment Joint Stock Company had to stop its plan to offer more than 152 million shares to existing shareholders to protect shareholder interests due to unfavorable market conditions and to ensure feasibility.

In December, the Southern Hanoi Housing and Urban Development Investment Corporation halted its fundraising plan. Previously, the company had finalized a plan to offer shares to the public at a ratio of 100:20, with a price of 10,000 VND per share, scheduled to take place from Q4 2024 to Q1 2025. With nearly 88.35 billion VND expected to be raised, the corporation planned to use 50 billion VND for project construction, 30 billion VND to repay debts, and nearly 8.35 billion VND to supplement working capital.

According to the leaders of Nam Ha Noi Corporation, the change in the offering plan aims to align with the current production and business situation, as well as the capital mobilization and utilization plan for the future. The corporation's cash flow will not be affected. Regarding the business plan, the corporation has already exceeded its profit target by 6% as early as the end of the third quarter of 2024.

There are still many bright colors.

According to data reported at the State Securities Commission's 2024 Year-End Review Conference, the total amount of capital raised through stock and bond offerings by public companies as of November 30th was VND 173,052 billion. The actual capital raising picture is not too bleak, as businesses in many sectors continue to succeed in the primary market.

Consecutive issuances through private placements and public offerings have been completed with very high successful distribution rates to shareholders. In the securities industry alone, more than a dozen companies completed capital increases in 2024. Most recently, Kafi Securities Joint Stock Company completed the offering of 250 million shares to existing shareholders at a price of VND 10,000 per share on December 17th. Accordingly, Gentle Sun Investment continues to contribute capital and maintain its 20% ownership stake in Kafi, while Uniben is no longer on the list of major shareholders after the issuance.

Masan Consumer's share offering plan is even more attractive as MCH shares are in the process of transferring from UPCoM to the HoSE. If successful, this could also be a boost for integrating IPOs with stock listings – one of the contents mentioned in the Draft Amendment to Decree 155/2020/ND-CP detailing the implementation of some articles of the Securities Law, which is currently being reviewed by the Ministry of Finance and the State Securities Commission.

A month ago, SSI Securities Corporation also distributed over 151.1 million shares to existing shareholders through the rights issue. Thanks to this capital increase, the company raised its capital to nearly 20,000 billion VND and regained its number one position in terms of charter capital size.

However, the top spot may soon be returned to Techcombank Securities Joint Stock Company (TCBS) as the company has just had its private placement plan approved for 25 individuals. With a total of 118.8 million shares at a price of VND 11,585 per share, TCBS will raise VND 1,376.7 billion; its charter capital will increase to VND 20,801.5 billion.

New plans are still being continuously launched by many securities companies, showing that this wave of capital raising has not cooled down, such as the plan to offer nearly 360 million shares of Ho Chi Minh City Securities Corporation (HSC) which was approved in early December 2024.

According to Mr. Dao Hong Duong, Director of Industry and Stock Analysis at VPBankS Research, outstanding customer loans (margin) across the market reached a record high (VND 232,000 billion), a 20% increase compared to the Covid-19 period. The growth rate in asset value of securities companies is financed by additional capital contributions from shareholders and investors. This significant increase in capital also provides a driving force for industry profits.

Many manufacturing companies have also announced plans to raise trillions of dong. According to the plan approved by shareholders, the offering is expected to take place in the fourth quarter of 2024 or the first quarter of 2025. Vinpearl will issue 70 million shares. With an offering price of 71,350 dong per share, Vinpearl estimates it will raise nearly 5,001 billion dong if the shares are successfully distributed to shareholders.

Masan Consumer Corporation (Masan Consumer, ticker MCH) has finalized a plan to offer shares to existing shareholders at a rate of 45.1%, equivalent to 326.8 million new shares. Masan Consumer expects to raise the largest amount of capital since its listing, at VND 3,268 billion, while increasing its charter capital to over VND 10,623 billion.

Source: https://baodautu.vn/huy-dong-von-qua-san-chung-khoan-nguoi-tang-toc-ke-de-chung-d235809.html