HCM CITY — Shares of the State-owned Việt Nam Rubber Group (VRG) fetched an average of VNĐ13,011 (US$ 58 cents) as its initial public offering went undersubcribed yesterday, according to the HCM City Stock Exchange.
The price was not much higher than the initial price of VNĐ13,000 VRG had set in the auction for selling its 475 million shares, equivalent to 11.88 per cent of its equity.
The highest bid was VNĐ20,800 and the lowest, VNĐ13,000.
Only 100,762,400 shares, or 21 per cent of the shares offered, were bought by 462 individuals and 36 institutional investors.
Data from the bourse shows only 33 foreign investors had registered to bid.
The group raised around VNĐ1.3 trillion from the auction, well below its expectation of VNĐ6.2 trillion.
The IPO was undersubscribed though VRG has been reporting profits since 2016 and has advantages like possessing 300,000ha of rubber plantations in Việt Nam and 120,000ha in Laos and Cambodia.
According to some analysts, VRG shares failed to attract foreign interest due to its stringent requirements.
For instance, strategic partners had to have a charter capital of at least VNĐ5 trillion in case of financial institutions and at least VNĐ1 trillion in case of others. They are also required to retain their stakes for at least five years.
Besides, the fact that the Government still owns 75 per cent of VRG was also a deterrent for them.
After the IPO, the group plans to sell another 475 million shares to strategic investors, around 50 million shares to its employees at a discount and 831,000 shares to its trade union.
It will list on UPCoM on April 1 and later on the HCM Stock Exchange. — Đức
