GCash poised for largest IPO in PH history after valuation hits $5 billion

Inquirer file photo

The anticipated initial public offering (IPO) of GCash looks promising as its valuation doubled to $5 billion with new funds from Ayala Corp. and Japan’s largest bank MUFG Bank Ltd.

Globe Telecom, parent firm of GCash operator Mynt, stated Ayala’s AC Ventures Holdings Inc. acquired another 8 percent in GCash for P22.9 billion, increasing its stake to 13 percent.

The deal involves subscription to 157.62 million common shares priced at P145.372 each.

MUFG, in a separate statement, said it injected $393 million into Mynt, representing an 8-percent stake.

The Japanese company has been investing in digital startups across the Asia-Pacific region, including online lending app Home Credit Philippines.

The recent fundraising activity is yet to be finalized. Investment banker Morgan Stanley was the exclusive financial advisor to Mynt for the transaction.

Further, another investor is expected to join Mynt as the conglomerate of the Zobel family is also “currently in discussions” with a party who “expressed interest in acquiring a portion of its ownership stake” in the GCash operator, Ayala said. No further details have been provided yet.

Potentially largest IPO

AP Securities Inc. research head Alfred Benjamin Garcia said the entry of a new strategic investor would bode well for the company that has been hinting on a stock market debut.

“Getting this visibility of the potential valuation of GCash would boost demand for the IPO if and when it happens,” Garcia told the Inquirer.China Bank Capital Corp. managing director Juan Paolo Colet, meanwhile, said it was now expected that the IPO would be priced higher than the latest valuation of $5 billion.

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“That could potentially make it the largest IPO in the Philippines, assuming they decide to list in the local market,” Colet told the Inquirer.

In 2021, consumer goods company Monde Nissin Corp. made the most successful market debut in Philippine history after raising P48.6 billion from its IPO.

GCash, for its part, has been gearing up for a public offering that can help it further scale the business.

The company previously said that an IPO could be launched by the second half of this year but GCash eventually eased on its stance, saying it was still evaluating the stock market first. Globe Group president Ernest Cu earlier even said there was “no hurry” to go public.

Global expansion

The investing public welcomed the equity deals, with Globe’s shares—second most active stock—climbing by 2.59 percent to P2,218 each yesterday. The share price of Ayala, however, fell by 0.25 percent to P590.

The fresh deal made GCash the first “unicorn” in the country to achieve the $5-billion valuation, a marked increase from $2 billion from the last funding round in 2021.

Back then, Mynt achieved “double unicorn” status with a $300-million equity investment from global investment giant Warburg Pincus, New York-based global private equity and venture capital firm Insight Partners and Bow Wave Capital, one of the company’s existing investors.

Prior to capital infusions from Ayala and MUFG, Globe and Chinese business magnate Jack Ma’s Ant Group held ownership of 35 percent and 34 percent, respectively, in GCash.

“Due to confidentiality reasons, we are unable to disclose the exact percentage of shareholding post transaction but Globe and Ant remain two of the major shareholders,” the e-wallet brand told the Inquirer.

Mynt tripled its net income to P6.7 billion last year. The homegrown brand has been expanding its presence abroad, including the United States, Canada, the United Kingdom, Australia, Italy, Japan, Germany, Spain, the United Arab Emirates, Qatar, Hong Kong, Taiwan and South Korea.