Maynilad Water Services Launches Major IPO Despite Philippine Market Challenges

Major Philippine Water Utility Proceeds With Landmark Offering

Maynilad Water Services, a unit of Indonesian billionaire Anthoni Salim’s Metro Pacific Investments, is moving forward with what reportedly would be the Philippines’ largest initial public offering since 2021, according to sources familiar with the matter. The water utility company aims to raise up to 28.5 billion pesos ($490 million) through its maiden share sale after setting the IPO price at 15 pesos per share.

Offering Structure and Share Distribution

The company is reportedly selling as many as 1.9 billion shares, including 249,047,600 primary common shares for over allotment and 24.9 million common shares that will be sold to Salim’s First Pacific, according to the offering documents. Sources indicate that aside from the sale of primary shares, Maynilad Water Holding – whose shareholders include Metro Pacific, tycoon Isidro Consunji’s DMCI Holdings and Japan’s Marubeni Corp. – plans to sell 354.7 million shares at the IPO price, raising an additional 7.1 billion pesos in a secondary offering.

Market Challenges and Investor Sentiment

Despite attracting cornerstone investors such as the International Finance Corp. and the Asian Development Bank, which committed to buy shares worth $245 million at 15 pesos each, analysts suggest the stock may struggle in the short to medium term. Market sentiment has reportedly been soured by a government corruption scandal involving supposed flood control projects that weren’t delivered by contractors who allegedly gave kickbacks to politicians.

“The corruption scandal soured the appetite of many retail investors even though Maynilad is an attractive stock,” said Jonathan Ravelas, managing director at Manila-based consultancy firm eMBMS. “It’s hard to attract investors when you have a systemic issue of corruption in government.”, according to industry news

The benchmark Philippine stock index has fallen almost 7% this year, making it one of the worst performing stock markets in Southeast Asia, according to market data.

Valuation and Financial Prospects

At 15 pesos a share, Maynilad is valued at 7.2 times estimated 2025 price to earnings, a premium over the 6.9 times multiple Manila Water is trading at, according to Benjamin Garcia, head of research at AP Securities. Garcia noted that “the offer is prudently priced and offers sufficient modest upside,” adding that “Maynilad is a viable defensive and dividend play primarily due to its high earnings visibility and generous dividend policy.”

The company reportedly booked 7.5 billion pesos in first-half net income, up 19% from the same period in 2024. According to its prospectus, Maynilad plans to use proceeds from the offering for capital expenditures and general corporate purposes.

Dividend Policy and Future Outlook

The utility stated in its prospectus that available cashflow for dividend payouts may “increase significantly” from 2028 onwards due to lower capital expenditure requirements. Sources indicate the company plans to distribute about 50% of its net income as annual dividend, according to its offering documents.

Maynilad Water Services provides water utility services to 17 cities and municipalities in western Metro Manila and parts of Cavite province, south of the capital. The company will start trading on the Philippine Stock Exchange on November 7, according to the scheduled timeline.

Corporate Background and Ownership Structure

Metro Pacific, which is helmed by CEO Manuel Pangilinan, also has interests in hospitals, tollroads, agriculture, as well as electricity generation and distribution. Besides Metro Pacific, Salim’s First Pacific also maintains stakes in Philippine telecom giant PLDT and Philex Mining Corp. With a net worth of $12.8 billion, Salim and his family are among the richest in Indonesia, with additional stakes in Infofood, Indonesia’s largest noodle maker, as well as banking, retail and coal mining operations.

References & Further Reading

This article draws from multiple authoritative sources. For more information, please consult:

• http://en.wikipedia.org/wiki/Maynilad_Water_Services
• http://en.wikipedia.org/wiki/Philippine_peso
• http://en.wikipedia.org/wiki/Initial_public_offering
• http://en.wikipedia.org/wiki/Philippines
• http://en.wikipedia.org/wiki/Metro_Pacific_Investments

This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.

Note: Featured image is for illustrative purposes only and does not represent any specific product, service, or entity mentioned in this article.