Investors flock to BTS fund's IPO; stock

At the market opening, BTSGIF, which was priced at Bt10.80 a share for the IPO, rose by 15.74 per cent to Bt12.50 on the biggest trade volume for an IPO on the Thai bourse. The stock closed at Bt12.20. BTSC is the operator of Bangkok’s Skytrain mass-transit system.

BTS Group Holdings chairman Keeree Kanjanapas said investors had confidence in the fund as a long-term investment with potential for regular dividend payments in line with the projected growth in the Skytrain’s passenger volume, which currently stands at 75,000 a day.

The Bt62.51-billion fund, traded in the transport and logistics sector, sold 5,788 million units via the IPO. Proceeds will be invested in the planned mass-transit extension routes. According to the government’s master plan, the fund will invest in 10 additional mass-transit rail routes and extend total rail coverage to about 508 kilometres across Bangkok and its vicinity by 2029.

BTS holds 33 per cent of the total investment units. The stake is projected to generate cash flow of Bt30 billion. However, this will not be sufficient for the entire mass-transit system expansion, which will require investment of Bt50 billion to Bt60 billion. Therefore, if the company is awarded additional mass-transit projects, it will have to borrow from financial institutions. BTS currently has no debt, and is considered to have room to take on Bt100 billion in debt.

BTS is considering paying an extra dividend to shareholders. The move was proposed at a board meeting yesterday.

The company expects to make a decision on higher Skytrain fares within a month. Fares have been frozen since 2005. The current fares are Bt15-Bt40, lower than the Bt18-Bt56 ceiling set under the firm’s concession contract. Keeree said the new fares would not hit the ceiling, as the operator wanted to minimise the impact on passengers.