Asset World’s record Bt48bn (US$1.59bn) IPO capped a remarkable year for Thailand’s capital markets, underlining investors’ desire to gain exposure to a resilient economy that offers real diversification away from China.
The deal was Thailand’s largest-ever corporate IPO and tied with the 2013 listing of True Telecommunications Growth Infrastructure Trust as the country’s biggest on record. Asset World also priced at a premium valuation, raising the bar for new listings and highlighting investors’ confidence in the company’s growth potential.
The biggest listings in Thailand have been from infrastructure trusts, where rules on gearing and distribution reduce the risk for investors. Asset World is a major property owner, with a portfolio of hotels, retail and office buildings across the country, but it opted for a conventional corporate structure to maintain maximum flexibility over its portfolio.
The Thai equity market held firm in 2019, and the benchmark Stock Exchange of Thailand index rallied to a 10-month high of 1,748 points in July after the first general election since 2014 passed without major incident. By the time Asset World came to market in September, however, investors were looking to take profits, and the SET index fell 1.3% during bookbuilding.
Against that backdrop, and with ambitious targets on both size and valuation, Asset World worked hard to engage investors through a more extensive roadshow than is customary for a Thai IPO. The management held more than 100 meetings with potential investors to convince them why Asset World was worth a premium valuation.
Around 90% of Asset World’s properties are freehold, in a country where leaseholds are usually capped at 30 years. The company has also the first right to buy any real estate from sister company TCC Group, which is also owned by Thai businessman Charoen Sirivadhanabhakdi.
To help generate momentum, Asset World brought in 13 cornerstone investors to take up about 41% of the offer, including a US$300m commitment from Singapore’s GIC.
Expectations of index inclusion helped drive demand, and the stock joined the benchmark Stock Exchange of Thailand 50 and SET 100 indices immediately after listing on October 10. FTSE Russell also added Asset World to the FTSE Global Equity Index Series.
Asset World sold 8bn shares at a fixed price of Bt6, valuing the company at a 2020 EV/Ebitda multiple of 30.8, compared to the industry average of 16.2x. Around 53% of the IPO went to international buyers.
Bank of America, Morgan Stanley and UBS were the joint international coordinators while Bualuang Securities, Kasikorn Securities, Phatra Securities and Siam Commercial Bank Securities were the joint domestic coordinators.