PSE sees heightened interest for IPO listing amid relaxed rules

Local bourse operator Philippine Stock Exchange Inc. (PSE) is expecting more companies to consider raising capital through an initial public offering (IPO) after it relaxed its rules and requirements.

In a statement, the PSE said it released its Amended Listing Rules, which contains relaxed profitability and operating history requirements and a temporary relief clause in considering applications due to the pandemic.

“The Philippine stock market lags behind when it comes to the number of companies going public. To address this issue, we relaxed certain requirements for listing in both the Main and SME Boards and we introduced a measure that will gauge a company’s suitability for listing despite the challenges it is facing due to the pandemic,” said PSE president and CEO Ramon Monzon.

“We are thankful to the Securities and Exchange Commission (SEC) for acknowledging our recommendations to ease some of our listing criteria. With this, we hope to attract more companies to dip their foot in the water and consider the stock market as their preferred avenue for capital raising,” Monzon said.

To formally apprise key IPO stakeholders about the Amended Listing Rules, the PSE said it will hold a two-part roundtable discussion this month titled “The Road to IPO”.

On April 7, the bourse operator said top PSE executives and its listings team will take the lead in the information session to discuss the Amended Listing Rules together with officers of investment houses, sponsors for listing applicants in the Small, Medium, Emerging (SME) Board and other key members of IPO deal teams.

Aside from the easing of the track record and operating history requirements and the COVID-relief clauses, the Amended Listing Rules contain Sponsor Model provisions for listing applicant companies in the SME Board.

Under the Sponsor Model, the PSA said an applicant’s suitability for listing will be evaluated in the first instance by a listing sponsor accredited by the exchange and if the applicant meets the suitability for listing criteria, after thorough assessment of its financial condition, business viability, future prospects and management track record among others, listing sponsor shall endorse the listing application to the PSE.

“The sponsor model has been practiced in other bourses and we see the merit of adopting this in the PSE. This listing format will be beneficial to SMEs and start up companies that have very good profitability and expansion potential but could not tap the stock market for funding because they do not qualify to list based on the set  criteria,”Monzon said.

“Going public is a once in a lifetime event for many companies. It is important for business owners to know firsthand what it takes to go public from those who have been through the IPO route. Companies who are considering listing will find a lot of value in attending this  roundtable discussion,” he added.—LDF, GMA News