The upcoming initial public offering (IPO) of shares offered by Central Retail Corporation Plc (CRC), Central Group's retail arm, is poised to meet the fast-track criteria of listing on the SET50 index with a reasonable price-to-earnings (P/E) ratio, analysts say.
The IPO price range of 40-43 baht suggests CRC's market capitalisation will be raised between 67.6 billion and 72.7 billion baht. CRC is poised to surpass BTS Rail Mass Transit Growth Infrastructure Fund, Thailand's biggest IPO to date, which raised more than 62.5 billion baht in 2013.
CRC's IPO period is scheduled for Jan 29-31 and Feb 3, with the tentative first trading day set for Feb 20. The company will offer 1.69 billion shares and an overallotment option of 169 million shares.
The retailer is also de-listing subsidiary Robinson Plc and offering a share swap to shareholders, Reuters reported.
CRC's IPO shares will be allocated to 11 cornerstone investors at 550.6 million shares, domestic investors at 371-401 million shares, foreign investors at 467-496.9 million shares and Robinson shareholders who accept the tender offer at 793.1-852.6 million shares.
CRC is a holding company that invests in multi-format and multi-category retailing platforms in Thailand and abroad.
Central Group is a conglomerate owned by the Chirathivat family, which is involved in various business ventures from retail and hospitality to real estate and merchandising.
Anuwat Ruamsuke, managing director of Phatra Securities, said CRC's IPO launch is poised to meet fast-track criteria for listing on the SET50 index, requiring an IPO share price to be above 1% of the Stock Exchange of Thailand index's market capitalisation or for a company's market capitalisation to be ranked among the top 20 of SET-listed firms.
Mr Anuwat said the company will get a net capital amount worth about 24 billion baht after a tender offer is made for Robinson shareholders. The capital is expected to be used for CRC's future business plans, apart from serving as internal cash flow.
Asia Plus Securities analyst Suwat Wattanapornprom said the IPO price of CRC is reasonable considering the one-year forward P/E ratio of 28-30.
"CRC shares are interesting both in terms of business model and the business's future, with growth potential expected to continue," Mr Suwat said.