Ananda Development is set to raise Bt5.6 billion ($182.2 million) from its initial public offering in Thailand, after fixing the price at the bottom of the indicative range.
After a week-and-a-half long international roadshow, the IPO priced on Monday. The retail offering starts today (November 28) and will continue until Friday, with the listing scheduled for December 7. Of the deal, 57.5% is going to international investors, while the remaining 42.5% is going to domestic investors, according to a term sheet.
The deal attracted demand both from hedge fund and long-only investors in Europe, Hong Kong and Singapore, a source said yesterday. The person added that 60% of the international tranche was allocated to anchor investors.
Ananda’s deal came as IPO activity in the country surged this year, and the stock market keeps up its bullish run.
So far in 2012, IPO volume in Thailand stands at $1.6 billion — the second highest year-to-date level on record after $1.8 billion raised at this point in 2004, according to Dealogic, whose records started in 1995. That compares with just $263 million during the same period last year.
The biggest offerings in Thailand so far this year are Tesco Lotus and Asia Aviation. Tesco Lotus, the Thai unit of UK supermarket chain Tesco, raised $450 million in March from public investors. In May, Asia Aviation, the holding company of budget airline Thai AirAsia, raised $143 million from its IPO.
The benchmark SET Index, which rose 0.5% yesterday, is up 26.5% since the beginning of the year, which compares with an 18.5% gain in Hong Kong’s Hang Seng Index.
Investors liked the attractive valuation, the management and the fact that Thai IPOs and the stock market have done very well this year, the source said.
Ananda, which is owned by the company’s founder, is offering 1.3 billion new shares for Bt4.2 each, set to raise $182.2 million. The offering size represents 40% of the enlarged share capital. There is no greenshoe option.
The deal was marketed at a price ranging between Bt4.2 and Bt4.9. The range valued Ananda at a 2013 price-to-earnings ratio of between 7.83 times and 9.13 times, based on the bookrunners’ consensus, according to another source.
Ananda focuses on residential housing and, according to one 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 and less reliance on bank borrowings.
Although there are no directly comparable companies, investors likely look at other listed Thai developers such as LPN Development, Asian Property Development and Supalai.
For reference, LPN Development trades at a 2013 P/E multiple of around 10 times, while Asian Property Development and Supalai both trade at around 8.9 times, according to Bloomberg data.
Ananda plans to use the proceeds from the IPO to fund investments, acquisitions and new projects, to repay existing bank loans and debts, as well as working capital. It was founded in 1999 by Chanond Ruangkritya, whose family has been in the real estate business in Thailand for more than 20 years, according to the company’s website.
Barclays was 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.
