The largest mobile wallet and e-payments platform in the Philippines, GCash is preparing for an IPO that could make it the largest ever in the history of the nation.
The Philippines, a country where a good chunk of the population remains unbanked, nearly every citizen has a GCash account.
GCash has raised the possibility of an initial public offering (IPO) after reporting a 300 per cent increase in net income to $115.7 million. This comes after the company’s valuation jumped to $5 billion.
The largest mobile wallet and e-payments platform in the Philippines, GCash is apparently preparing for an IPO that could make it the largest ever in the history of the nation. It is valued at 289.6 billion pesos in the local currency.
Japan’s MUFG Bank Ltd. and the Philippines behemoth Ayala Corp. made new investments that contributed significantly to this valuation gain.
The Ayala Group’s AC Ventures Holdings Inc. purchased an additional 8% share in GCash for 22.9 billion pesos ($395.4 million), increasing its ownership to 13%, according to a statement released by Globe Telecom Inc., the parent company of GCash operator Mynt.
A subscription for 157.62 million common shares, valued at 2.51 pesos apiece, is part of the agreement. In addition, MUFG contributed $393 million to Mynt, obtaining an 8% share.
This Japanese bank, which includes Home Credit Philippines, has been making frequent investments in digital businesses throughout the Asia-Pacific area.
Another investor is anticipated to join Mynt, even if the recent fundraising efforts are still being finished. Morgan Stanley is Mynt’s exclusive financial advisor. Talks are underway between the Zobel family conglomerate and a potential buyer of a portion of its ownership share in GCash.
Alfred Benjamin Garcia, research head at AP Securities Inc., pointed out that the company’s chances of making its stock market debut would be improved by the arrival of a new strategic investor. According to Juan Paolo Colet, managing director of China Bank Capital Corp., the IPO is anticipated to be priced higher than the most recent $5 billion estimate, which would make it the biggest in the Philippines.
With its most successful market debut in Philippine history, Monde Nissin Corp. generated Php48.6 billion ($839 million) in 2021 through its initial public offering (IPO).
In order to grow its business, GCash has been planning for an IPO, but the company has been conservative, with Globe Group President Ernest Cu saying there was “no hurry” to go public.
The stock deals were well received by the investment community; Globe’s shares increased by 2.59% to 2,218 pesos apiece, while Ayala’s shares decreased by 0.25% to 590 pesos.
With the new agreement, GCash – which was valued at $2 billion in the most recent funding round in 2021 – became the first “unicorn” in the Philippines to earn a $5 billion valuation.
Mynt previously became a “double unicorn” after receiving a $300 million equity investment from Bow Wave Capital, Insight Partners, and Warburg Pincus.
Prior to the financial infusions from MUFG and Ayala, Globe and Jack Ma’s Ant Group, respectively, owned 35% and 34% of GCash.
Globe and Ant Group are still significant owners even if the precise post-transaction shareholding percentages are still unknown.
In 2023, Mynt’s net income increased thrice to a total of Php6.7 billion ($115.7 million).
Globally, it has been spreading to the US, Canada, UK, Australia, Italy, Japan, Germany, Spain, UAE, Qatar, Hong Kong, Taiwan, and South Korea.
So far, the top five IPOs in the Philippines are – Monde Nissin Corp (almost $1.3 billion), Converge (almost $600 million), Robinson Retail Holdings Inc., (almost $650 million), SM Investments Corp. (about $500 million) and Cebu Air Inc., (almost $539 million).
