Vietnam has raised VND1.31 trillion ($57.7 million) from the initial public offering (IPO) of Vietnam Rubber Group (VRG) on Ho Chi Minh City Stock Exchange on February 2.
The proceeds were far lower than the state’s expectation of raising at least VND6.2 trillion ($273.1 million) from the IPO. Only 110.7 million shares were sold of the 475.1 million shares on offer in the auction.
The government had put up an 11.8 per cent stake on sale through the auction. It will sell an additional 11.8 per cent of VRG to domestic strategic partners. Some 1.22 per cent, or nearly 49 million shares, will be sold to current employees and 0.02 per cent to members of VRG’s trade union.
VRG’s IPO was similar in size to that of PetroVietnam Power Corporation (PV Power) conducted in January but the final result was glaringly different. On Wednesday, Vietnam raised $308 million (VND6.996 trillion) by selling 20 per cent of PV Power in an IPO.
Restricting foreign strategic investors, according to experts, is the main reason that made VRG’s IPO less attractive compared to Binh Son Refining and Petrochemical and PVOIL IPOs that raised $245 million and $184 million respectively for the Vietnamese government last week. All these IPOs had exceeded government expectations in terms of proceeds, reflecting strong investor interest.