Egat fund closes on first trading day up 4% from IPO

 

The country’s first SET-listed state-enterprise infrastructure fund worth Bt20.86 billion, trading under the ticker symbol EGATIF, saw its shares open at Bt10.50, 5 per cent to above its IPO pricing of Bt10 per unit, before climbing to peak at Bt10.90. The price closed at Bt10.40, with total daily trading volume of Bt36.92 billion.

EGATIF offered 2.085 billion IPO units at Bt10 per unit from June 22-26 with a total value of Bt20.86 billion. Krungthai Asset Management is the fund manager, while Siam Commercial Bank is financial adviser and underwriter.

After the IPO, there are three major unit holders. One is Egat, which has committed to hold 25 per cent of EGATIF for at least five years, Thai Life Insurance at 11.99 per cent and Egat Saving and Credit Cooperative at 8.34 per cent. 

Egat has invested in the right to availability payments of its latest plant, North Bangkok Power Plant Block 1, for a 20-year period with a contracted power-generation capacity of 670 megawatts.

Egat governor Soonchai Kumnoonsate said about Bt10 billion of the fund mobilisation from the IPO would be invested in electricity-generation expansion and the rest would be reserved for business expansion next year.

Pimolpa Suntichok, head of the corporate division of SCB, said EGATIF was the first infrastructure fund of a state enterprise and had been overwhelmingly welcomed by investors. 

EGATIF is expected to encourage other state enterprises to use this type of instrument to raise funds, possibly the Expressway Authority of Thailand and Airports of Thailand, she said.

Many financial institutions are pitching themselves as financial advisers to the state enterprises, she said, and added that clients in the private sector would launch infrastructure funds during the remaining months of this year.

On the demand for lending, she said corporate customers required funds to strengthen cost efficiency more than for new investments, so loan demand for working capital was small.

“Corporate customers give importance to how to carry on growth and keep profits rising. Amid the economic slowdown, cost efficiency is a key issue for them. Still, we have maintained our loan-growth target of 3-5 per cent this year from an expanding customer base,” Pimolpa said.

So far this year, SCB’s existing clients have referred new customers to the bank, including companies in renewable energy, contractors and subcontractors, she said.

Pimolpa noted that corporate customers were looking for mergers and acquisitions overseas, especially in the European Union, rather than in the domestic market because this could help strengthen cost efficiency and accelerate growth.

As for M&A in Thailand, the trend is the acquisition of food chains.