Thai based Indorama Ventures, a company focusing on polyester, will become the first company to go public in Thailand since April 2008 after pricing its initial public offering (IPO) at the bottom of the range. The size of the offering has been halved to 400 mln shares from over 900 mln shares, but the rest of the deal is well-covered. The IPO raised a total of Bt4.08 bln (US$123 mln), compared with earlier plans to raise US$347 mln. The reduction reflects the deteriorating sentiment for equities that led to several days of sell-offs globally. Additionally, global institutional investors have been focusing on reducing risk, curtailing their inclination for exposure to an emerging market like Thailand.
Initial investors who had already put in orders stayed in the book although some did reduce their orders in proportion to the smaller size. Based on the announced size of 75 mln shares, the international portion was about 5 times covered as some investors claim that they would buy additional shares in the secondary market to compensate for being scaled back in the primary allocation. However, sources said the allocations were skewed towards the top investors, which may limit that impact.
Almost 50% of the demand was from USA, over 30% from Asia, and 17-20% from European-based accounts. The buyers are primarily funds focused either on this region (Thai and ASEAN funds) or on emerging markets in general.