Singapore IPOs could raise $1.15b

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An Indian construction firm and a Malaysian provider of offshore oil-and-gas services are gauging investor appetite for planned initial public offerings in Singapore that could together raise up to $1.15 billion, the Wall Street Journal reported.

Larsen & Toubro Ltd. on April 7 started a premarketing exercise to test demand for an IPO of up to $800 million for its India toll-road assets, people with knowledge of the deal said. The move comes as the Indian conglomerate acts to tap investor interest on a revival in valuations on the subcontinent.

Meanwhile, PACC Offshore Services Holdings Ltd. – part of Malaysian billionaire Robert Kuok’s business empire – plans to start taking orders for a flotation of up to $350 million on Tuesday, according to a person with knowledge of this deal. It filed a preliminary IPO prospectus to Singapore’s central bank on Monday but didn’t provide any financial details.

The two proposed offerings come amid a relatively upbeat patch for Singapore’s equities market. If successful, they would give a much-needed fillip to other IPOs that are being lined up in the city-state, bankers say.
Larsen & Toubro has been looking to list its toll-road assets through a business trust in Singapore since last year, but delayed the plans because of weak market conditions.

Now, however, Indian stock markets are up more than 8 per cent in the past month. Singapore, too, is among the region’s most buoyant stock markets in the past month, chalking up gains of more than 4 per cent. But booming stocks and underlying valuations will have to offset growing gloom about yield plays such as business trusts, the vehicle Larsen & Toubro is using to list its toll-road assets. Trust listings in Singapore, Asia’s top venue for such IPOs, have fallen this year, as yield-seeking investors leave emerging markets for developed ones, in anticipation of rising interest rates in the US.

Amid historically low interest rates, investors had flocked to Singapore listings of real-estate investment trusts and business trusts, which had been offering attractive yields. But the Fed’s decision to scale back its stimulus program as the economy improves has led to the prospect of rising interest rates there and elsewhere, leading investors to return to the relative safety of developed markets or demand higher yields elsewhere.

Such sentiment has already hurt some planned listings in Singapore. Last month, South Korean shopping-mall operator Lotte Shopping Co. delayed its nearly $1 billion trust IPO as investors sought higher yields that the company wasn’t willing to pay.

Larsen & Toubro, listed in Mumbai with a market value of nearly $20 billion, is planning for its toll-road business trust to pay an initial yield in the low double digits, said one of the people with knowledge of the deal. The premarketing exercise will go on for two weeks, the people said.

If demand is met and Larsen & Toubro goes ahead with the offering, the company’s business trust may list on the Singapore Exchange by late May or early June, one of the people said.

PACC, meanwhile, has secured Hwang Investment Management Bhd. and Fortress Capital Asset Management as cornerstone investors in its planned IPO, according to its prospectus. Hwang Investment and Fortress Capital would each buy 85.6 million new PACC shares at an unspecified IPO price, the prospectus said.

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Reading Time: 3 minutes

An Indian construction firm and a Malaysian provider of offshore oil-and-gas services are gauging investor appetite for planned initial public offerings in Singapore that could together raise up to $1.15 billion, the Wall Street Journal reported.

Reading Time: 3 minutes

An Indian construction firm and a Malaysian provider of offshore oil-and-gas services are gauging investor appetite for planned initial public offerings in Singapore that could together raise up to $1.15 billion, the Wall Street Journal reported.

Larsen & Toubro Ltd. on April 7 started a premarketing exercise to test demand for an IPO of up to $800 million for its India toll-road assets, people with knowledge of the deal said. The move comes as the Indian conglomerate acts to tap investor interest on a revival in valuations on the subcontinent.

Meanwhile, PACC Offshore Services Holdings Ltd. – part of Malaysian billionaire Robert Kuok’s business empire – plans to start taking orders for a flotation of up to $350 million on Tuesday, according to a person with knowledge of this deal. It filed a preliminary IPO prospectus to Singapore’s central bank on Monday but didn’t provide any financial details.

The two proposed offerings come amid a relatively upbeat patch for Singapore’s equities market. If successful, they would give a much-needed fillip to other IPOs that are being lined up in the city-state, bankers say.
Larsen & Toubro has been looking to list its toll-road assets through a business trust in Singapore since last year, but delayed the plans because of weak market conditions.

Now, however, Indian stock markets are up more than 8 per cent in the past month. Singapore, too, is among the region’s most buoyant stock markets in the past month, chalking up gains of more than 4 per cent. But booming stocks and underlying valuations will have to offset growing gloom about yield plays such as business trusts, the vehicle Larsen & Toubro is using to list its toll-road assets. Trust listings in Singapore, Asia’s top venue for such IPOs, have fallen this year, as yield-seeking investors leave emerging markets for developed ones, in anticipation of rising interest rates in the US.

Amid historically low interest rates, investors had flocked to Singapore listings of real-estate investment trusts and business trusts, which had been offering attractive yields. But the Fed’s decision to scale back its stimulus program as the economy improves has led to the prospect of rising interest rates there and elsewhere, leading investors to return to the relative safety of developed markets or demand higher yields elsewhere.

Such sentiment has already hurt some planned listings in Singapore. Last month, South Korean shopping-mall operator Lotte Shopping Co. delayed its nearly $1 billion trust IPO as investors sought higher yields that the company wasn’t willing to pay.

Larsen & Toubro, listed in Mumbai with a market value of nearly $20 billion, is planning for its toll-road business trust to pay an initial yield in the low double digits, said one of the people with knowledge of the deal. The premarketing exercise will go on for two weeks, the people said.

If demand is met and Larsen & Toubro goes ahead with the offering, the company’s business trust may list on the Singapore Exchange by late May or early June, one of the people said.

PACC, meanwhile, has secured Hwang Investment Management Bhd. and Fortress Capital Asset Management as cornerstone investors in its planned IPO, according to its prospectus. Hwang Investment and Fortress Capital would each buy 85.6 million new PACC shares at an unspecified IPO price, the prospectus said.

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