Upson International IPO is TODAY
Upson International [UPSON 2.40] will begin life on the PSE this morning, after a very quiet offer period where UPSON and UPSON’s owner, Lawrence O. Lee, raised P1.65 billion through selling 687.5 million shares to the public. Approximately 90% of the shares sold were primary shares The IPO has a stabilization fund (operated by First Metro Securities Brokerage).
MB Allocation Poll: Thanks to the 41 Barkadans that responded to the MB Allocation Poll, we can get a better understanding of the demand for UPSON’s stock during the IPO offer period, and that might give us an indication how UPSON might be received when it goes live later this morning.
86% total allocation rate: The 41 Barkadans reported requesting a total of P2,304,240 in UPSON shares, and reported receiving P1,992,480 of that request in actual allocations. That’s an allocation rate of 86%. Anything less than 100% tells us that some bucket of shares could have been oversubscribed.
Top 3 brokers: Taking a look at the top 3 brokers used to buy the shares tells a more complete story. The most popular method to buy UPSON shares was through the PSE EASy platform, where Barkadans received an allocation rate of 100%. Next was COL Financial, which provided an allocation rate of 34%. Third was Abacus Securities, which provided an allocation rate of 100%.
MB BOTTOM-LINE
The full allocation of the PSE EASy requests indicates (to me) that retail demand was weak for this IPO.
While one could point to the low allocation rate for the COL Financial requests as evidence of demand, brokers have complete discretion as to how they allocate their IPO quotas, so what one broker does is not necessarily indicative of the entire group.
COL Financial could simply have given bigger UPSON allocations to its preferred clients, with the high number of fractional allocations delivered to “lesser” clients being just a natural consequence of that business decision.
Usually when there is a true oversubscription situation, Barkadans will report that most brokers provided only partial allocations in the 50-75% range.
Here, with the third-largest source (Abacus Securities) providing 100% allocations, that seems to align with the full allocations provided by PSE EASy, which together suggest that the COL Financial result is an outlier.
My conclusion, based on these anonymous and unconfirmed survey results, is that the UPSON IPO is likely not to receive a great deal of retail demand when it hits the market. Thank you for participating! Congrats to the winner of the raffle!
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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