Vietnam’s largest residential developer prices shares at top of marketed range.
Vinhomes, the residential property arm of Vietnamese conglomerate Vingroup, has priced the country’s biggest equity offering at the top of its prospective range, raising $1.35bn. Reporting by Financial Times
Vietnam’s largest residential developer on Monday priced 268m shares at the upper end of the indicative range of 110,500-114,700 Vietnamese dong each, according to bankers close to the deal.
The share issue is the country’s largest since Vingroup’s shopping mall subsidiary raised $708m at the end of last year. The Vinhomes deal has been structured like Vincom Retail’s, with shares privately placed to leading investors rather than offered to the public.
According to one banker, the book was “well-oversubscribed” on the back of demand from both global and regional funds, helping the deal surpass Vingroup’s $1bn target.
The Vinhomes listing will set a new high-water mark for share offerings in Vietnam, which has drawn record amounts of foreign investment over the past year despite being officially classified as a “frontier” market.
The south-east Asian country’s economy grew by 7.4 per cent in the first quarter of the year, and its communist government has been disposing of shares in companies in sectors ranging from food and beverage to banking as part of a privatisation drive.
The Ho Chi Minh City stock exchange has been one of Asia’s best performers this year, thanks to the country’s improved economic indicators and strong earnings at listed companies, and is up 5.5 per cent year to date.
One analyst said the size of the Vinhomes issue had allowed it to draw more large investors than some previous ones.
“The bigger the issue, the more the large global institutions seem to be interested, because they can deploy more cash in a single bound than they previously were able to do,” said Kevin Snowball, chief executive officer of PXP Vietnam Asset Management in Ho Chi Minh City.
No Vietnamese share offering has yet been valued at more than $1bn. Last month Vietnam’s Techcombank launched an initial public offering aiming to raise as much as $922m.
Vinhomes had a 15 per cent share of residential properties sold in Hanoi and Ho Chi Minh City between 2015 and 2017, and just under half of the market for high-end luxury condos. The company plans to broaden its current focus on Hanoi and Ho Chi Minh City, the two biggest cities, to the rest of the country.
Last month Vingroup said that GIC, the Singapore sovereign wealth fund, had agreed to invest $1.3bn in Vinhomes, buying shares and extending a “debt-like instrument” to the subsidiary.
Credit Suisse, Citi, Deutsche and Morgan Stanley are joint global co-ordinators. Shares are set to start trading in mid-May.
By Emma Dunkley in Hong Kong and John Reed in Bangkok