EXPLAINER: What is an IPO?

Fintech giant Mynt Inc., the parent company of GCash, began trading on the Philippine Stock Exchange (PSE) on Tuesday following its historic initial public offering (IPO).

The company offered 8,027,409,600 common shares, with an overallotment option for up to 1,204,111,400 additional secondary common shares, at P6.60 apiece.

Mynt raised more than P60 billion from its IPO and debuted on the local bourse with a market capitalization of P441.5 billion, or roughly $7 billion.

The offering was touted as the largest IPO in the PSE’s history.

But what is an IPO?

An IPO is the process through which a private company offers its shares to the public for the first time and lists them on a stock exchange. It allows retail and institutional investors to buy shares and acquire an ownership stake in the company.

The process begins with the preparation and submission of a prospectus, a legal document indicating the company's intent to sell shares to the public, to the Securities and Exchange Commission (SEC).

The company must then secure the necessary regulatory approvals from the SEC and the PSE before proceeding with the offering.

With the help of investment banks, the company determines the price of its shares and opens the offer period, during which investors can subscribe to the shares before the company’s listing on the local bourse.

With a market capitalization of P441.5 billion, PSE President and CEO Ramon Monzon said Mynt ranked as the seventh-largest domestic company listed on the exchange, “further cementing its position as a fintech powerhouse.”

“The exchange regards this offering as a significant catalyst for the Philippine equities market,” Monzon said. — VBL, GMA News