Bankers started investor education yesterday for Ananda Development, a property developer that is aiming to raise $200 million to $250 million from an initial public offering in Thailand. The listing is scheduled for early December.
The deal comes amid a pick-up in IPO activity in Thailand. So far this year there have been 16 IPOs, which have raised a combined $1.39 billion, according to Dealogic. That compares with eight deals that raised a total of $259 million during the same period last year.
The biggest offering this year was by a property fund backed by UK supermarket chain Tesco, which raised Bt18.4 billion ($602 million) in March. However, 25% of that deal was taken up by a company controlled by Tesco itself. The fund comprised 17 malls anchored by Tesco Lotus stores.
The second-biggest deal was the May IPO of Asia Aviation, the holding company of budget airline Thai AirAsia, which together with a concurrent private placement raised a total of $229 million.
The Thai stock market has also been faring strongly this year and is currently the best performing market in Asia. The benchmark SET Index is up about 27% since the start of the year, compared with a 17% gain in Hong Kong’s Hang Seng Index. The Tesco property fund has risen 48% since its listing while Asia Aviation is up 24%, which should help in terms of making investors more comfortable putting money into other newcomers.
Ananda was founded in 1999 by Chanond Ruangkritya, whose family has been in the real estate business in Thailand far more than 20 years, according to the company’s website.
Ananda, which is still owned by the founder and his family, plans to sell $200 million to $250 million worth of new shares, which could bring the company’s free-float to as much as 40%, a source said.
It plans to use the proceeds from the IPO to repay existing bank loans and debts, and to fund investments, acquisitions and new projects, as well as working capital, according to a term sheet.
The company focuses on residential housing and, according to the source, investors like its strategy of building condominiums close to train stations in Bangkok. It tends to start construction immediately after the land has been acquired, resulting in a quick turnaround of its projects. This should be viewed as positive as such a business model typically requires less bank borrowings.
Although there are no directly comparable companies, investors will likely look at other listed Thai developers such as LPN Development, Asian Property Development and Supalai, the source said.
According to the current timetable, the investor education is expected to continue until November 9, with the bookrunners testing investor appetite in Hong Kong, Singapore, London and continental Europe.
The domestic roadshow is expected to start on November 6 and end on November 9, while the international roadshow is expected to run from November 12 through November 23. The pricing is expected on November 26, and the listing is scheduled for December 7.
Barclays is the sole global coordinator for the deal and an international bookrunner together with CIMB. The domestic joint bookrunners are Bualuang Securities and KT Zmico Securities.
