SCB helping mid-sized firms go public on SET
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THE TREND of large corporations launching initial public offerings will be also seen in emerging industries with mid-sized corporations moving from families to a growth business, according to Siam Commercial Bank.
Going public had been popular with conglomerates and large corporations rather than mid-sized companies due to their need for funds besides bank loans to support expansion here and abroad.
As a financial adviser, SCB, one of major players in investment banking among local banks, acknowledges that the number of large corporations floating shares to the public will gradually decline. So what the bank is doing is now is approaching companies in emerging industries such as renewable energy and innovation to tap the stock market, Vorada Thangsurbkul, first executive vice president and head of investment banking division 2, said last week.
For example, Eastern Polymer Industries is an innovative company with a market capitalisation of Bt10 billion.
Most companies that SCB is advising are choosing the Stock Exchange of Thailand rather than the Market for Alternative Investment because the main board has more liquidity to attract investors.
SCB’s investment strategy is to offer integrated services to corporations since they used banks loan to grow enough to be listed companies.
Most Thai companies are run by families, but the change in generations is prompting a transition from private companies to international enterprises and IPOs are a tool to support the continuing development of those companies.
“We have to help them to see the value of either IPOs or mergers and acquisitions, not only support them with loans.
“An example is the deal between Hemaraj Land and Development and WHA. We knew the major shareholder wanted to exit the industry but what we had to do was help them to see the value of selling shares to WHA,” she said.
Next year, at least three companies in emerging industries will do IPOs on a scale of Bt2 billion-Bt4 billion each.
The bank hopes more infrastructure funds and real estate investment trusts will be introduced like the infrastructure fund of the Electricity Generating Authority of Thailand, which is expected to excite the market in the first half of next year.
If the REIT conversion process is approved, investors will gain more choices.
SCB targets stock, infrastructure fund and REIT IPOs under its mandate to surge to Bt100 billion next year from Bt80 billion this year, but the interest rate policy will be a factor affecting IPO prices, she added.
