Converge price plunges upon debut

MANILA, Philippines — Converge Information and Communications Technology Solutions Inc. (Converge ICT) successfully made its debut in the stock market yesterday, raising P29.1 billion, including shares for over-allotment, marking the largest-ever initial public offering in the country.

However, its share price tumbled by as much as 10.6 percent in the first hour of trading to P14.92 per share before closing at P15.22 percent, down 9.4 percent from its IPO price of P16.8 per share.

Converge ICT founder and CEO Dennis Anthony Uy said the listing is a testament to the company’s strong operational and technological capabilities.

“We are fully committed to building the largest fiber broadband network in the Philippines and to providing affordable and reliable high-speed internet connectivity to millions of Filipinos nationwide. Our extensive, proprietary end-to-end fiber broadband network will enable us to support the digitalization of the Philippine economy,” he said.

The company will use the proceeds for expansion as it targets to cover 55 percent of households in the Philippines by 2025.

The IPO has attracted overwhelming interest from both international and domestic investors – over P4.856 billion in domestic demand, making it one of the largest domestic IPO take-ups in the country.

On the international front, the offering was well oversubscribed and has drawn high quality investors, including OMERS, Genesis, Thornburg and Macquarie as among the cornerstone investors.

Cornerstone investment reached P10.93 billion, covering approximately 40 percent of the base offering, and the investments from blue-chip long-only institutional investors accounted for over 80 percent of the transaction.

Warburg Pincus, a leading global private equity firm, has been the largest and most important investor and partner to Converge.

Saurabh Agarwal, managing director of Warburg Pincus, said the company is pleased with the partnership with Converge. “This is no small feat,” Agarwal said on the company’s market debut.

The fiber broadband market in the Philippines is highly under penetrated and presents a tremendous opportunity for outsized growth,” Agarwal said.

“With its successful public listing today, Converge is well positioned to accelerate its growth trajectory and further capture a substantial share of the market. We look forward to continuing our active partnership with the company and expect to work closely alongside the founders and its very talented management team to build the largest high-speed fixed broadband operator in the Philippines,” he said.

In the first half of 2020, Converge ICT generated P6.5 billion in revenue, a 65 percent growth over the same period last year.