According to CEO Cu, 10-15% is reasonable, as it gives GCash an opportunity to assess the demand, as there are various foreign investors who are interested in the company.
Philippines mobile wallet company GCash aims to lower the minimum public float of 10 per cent -15 per cent for its planned initial public offering (IPO). President and CEO of Globe Telecom Inc., Ernest Cu, who represents Mynt, the parent company of GCash said that 20% is too high a number, given the size of the IPO, and is therefore pushing a slightly lower figure.
Cu believes that 10-15% is reasonable, as it gives the company an opportunity to assess the demand, as there are various foreign investors who are interested in the company. Before lowering its public float, GCash must obtain the approval of the Philippines Securities and Exchange Commission. This proposal comes at a time when the country’s stock market is plagued by low liquidity and weak valuations. This would not reflect too well on a large offering like that of GCash.
Cu has rest assured that a potential IPO will not take place before the end of the year, as the company is in no rush to go public. It was reported in January of this year that the company had hired banks like Citi, Jefferies and UBS to work on an IPO of nearly $1.5 billion. This would be the Philippines’ biggest stock offering to date, surpassing the $1 billion IPO of Philippine food company Monde Nissin that took place in 2021 and was expected to take place in the second half of 2025 or 2026.
With approximately 94 million users, GCash’s valuation rose to $5 billion during its last funding round when Japan’s Mitsubishi UFJ Financial Group Inc. bought 8% of the company’s stake. The Jack Ma-backed Ant Group is yet another prominent shareholder. According to GCash President and CEO Martha Sazon, the mobile wallet company was expanding its lending and investment products, intending to diversify from its primary payments business, ahead of the listing.
In an interview with Bloomberg News, Cu said that the rules for such an IPO have been in place for quite some time now, and must be amended, given that 20% is too high a number and that these rules are more suited for smaller IPOs. He believes that if flexibility is given to the firms which are listing will enhance the firms’ ability to go public, increasing the number of IPOs in the country.
GCash has recorded stable business growth, with lowered single-digit growth rates, a common sign of mature markets and firms. The acceleration of the prepaid fibre offering has been one of the key revenue drivers for the company, as it is the first of its kind and can be done completely online. More such digital features are instrumental in expanding the firm’s business.
GCash boasts of being the number one finance app and largest cashless ecosystem in the Philippines, offering services like remitting money and making bill payments. It is also set to launch its tap-to-pay feature overseas to help Filipino travellers enjoy seamless transactions.
With an overwhelming percentage of the country’s population using Android devices, this feature will first be available to Android users. However, GCash is actively working towards collaborating with Apple to bring this feature to iOS users as well.
Having pilot tested this feature in retail stores and restaurants late last year, the company wants to soon induct this technology into public transportation as well. This international expansion of the tap-to-pay feature is part of GCash’s bigger strategy to expand digitalisation by making digital payment solutions more accessible and convenient, not just domestically, but for international use as well.
Companies jumping onto the digital bandwagon are bound to experience exponential growth, and GCash is no exception. While there are certain hurdles for the company as it tries to go public, its revenue is bound to skyrocket once these bureaucratic challenges are overcome. Additionally, if the administrative red tapes are changed to become more business-friendly, more companies will be encouraged to go public in the Philippines.
