CRC inches lower in first day of trading

CRC inches lower in first day of trading

Price 'acceptable' for Central's retail arm

Suthikiati Chirathivat (right), vice-chairman of Central Retail Corporation, celebrates the first day of trade for Central Retail Corporation Plc, Thailand's biggest-ever equity IPO by market cap. Chanat Katanyu
Suthikiati Chirathivat (right), vice-chairman of Central Retail Corporation, celebrates the first day of trade for Central Retail Corporation Plc, Thailand's biggest-ever equity IPO by market cap. Chanat Katanyu

The share price of SET-listed Central Retail Corporation Plc (CRC) edged lower during the first day of trade for Thailand's biggest-ever equity IPO by market cap amid sentiment blighted by the coronavirus epidemic.

Yesterday's price stood at 41.75 baht per share, down from the initial offering price of 42 baht.

CRC moved within a range of 41.50-42.25 baht in trade worth 7.6 billion baht.

The company is reportedly raising funds of 78.1 billion baht after setting the IPO price at 42 baht per share for up to 1.69 billion IPO shares and an over-allotment option of 169 million shares.

Some 562.28 million shares, or 52.2% of total IPO shares, were offered to domestic investors, while 514.1 million were offered to foreign investors. This excludes 783.7 million shares offered to ROBINS shareholders and the over-allotment option shares.

CRC, Thailand's biggest retailer and the retail arm of Central Group, is a holding company investing in multi-format and multi-category retail platforms in Thailand, Italy and Vietnam.

Analysts previously expected CRC shares to trade above their IPO price. The stock's market capitalisation makes it the largest-ever listing on the Stock Exchange of Thailand, presenting a shortcut for CRC shares to be included in the SET50 index.

But a multitude of risks have jolted investor confidence in equity investment.

The current share price is "acceptable" amid lacklustre sentiment in equity trading and several organisations' downward revisions of GDP growth this year, said Pichet Sithi-Amnuai, president of Bualuang Securities, one of CRC's main underwriters.

CRC chairman Prasarn Triratvorakul said the coronavirus outbreak could impact first-quarter GDP growth, but the economy could recover in the second half if the epidemic is not prolonged.

"We have to closely monitor Covid-19 developments, which are considered to be a dynamic situation," Mr Prasarn said, using the medical jargon for the virus.

A greenshoe option of 169 million shares, representing 10% of total IPO shares, can be exercised if the IPO price trades below 42 baht per share and must only be exercised within 30 days.

If such an option is exercised, it would be on a gradual basis in accordance with stock market conditions, said Anuwat Ruamsuke, managing director of Phatra Securities.


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