Ovialand planning 2022 IPO to raise P1.5 billion for country-wide expansion

The company is a subsidiary of the Malate Construction and Development Corp (MCDC), which was founded by Giovanni Olivares. Ovialand [OVIA? pre-IPO] is led by Fatima Olivares-Vital, Mr. Olivares’s daughter, and is a low-cost housing developer that has traditionally operated in Luzon, but is looking to expand its landbank of 45 hectares with purchases in Luzon, Visayas, and Mindanao.

The company is preparing for a mid-2022 IPO (Q2 or Q3), and the P1.5 billion raised will go to further develop OVIA’s existing landbank, but also expand that landbank into holdings in the other regions of the country. They have completed 350 units so far this year out of a planned 550 units, and believe that their 45-hectare landbank roughly represents another 3,000 units.

MB BOTTOM-LINE

 The company said that its IPO would depend on “market conditions and everything”, so I’m going to add the IPO to my schedule but I’m not going to hold my breath for it. If our mid-and mass-market housing developers like Cebu Landmasters [CLI 3.26 1.56%], 8990 Holdings [HOUSE 7.40], and Sta. Lucia Land [SLI 3.07 2.33%] is to be believed, the demand for OVIA’s mass-market housing product is likely very strong right now, and will likely remain strong for the foreseeable future.

Assuming OVIA grows at a conservative 10% each year from the end of 2021 onward, that means that the company could possibly burn through its landbank in about 4.5 years (mid-2026) and be turning out nearly 1,000 units per year by that time. If OVIA has the construction capacity and the shovel-ready projects that could be converted into salable units, I personally don’t see what “market conditions’ could have to do with it. As CLI, HOUSE, and SLI showed, the pandemic didn’t dent the demand for this kind of housing. If you build it, they will buy it. In that kind of environment, why play footsie with the market and potential investors who might be excited to be a part of your growth story?

Join the party, sell some equity, and sell like crazy into this massive wave of housing demand. With the macro conditions the way that they are, if OVIA doesn’t go public next year, I don’t think it will be because of the market conditions. But that’s just me. I’m still very excited to read their preliminary prospectus, and I hope to be able to talk more about their potential IPO in the coming months!

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