TFFIF largest IPO since 2015 on strong demand

TFFIF largest IPO since 2015 on strong demand

Thailand Future Fund (TFFIF) has offered IPO units at the top end of the proposed range with some 4.47 billion to raise 44.7 billion baht, emerging as the country's largest public listing since 2015.

With the strong demand, the fund's first-year return stands at 4.75%, said Varah Sucharitakul, executive director at Finansa Securities.

The fund received an overwhelming response from the public, with retail investors' combined subscription value of 28.8 billion baht exceeding the originally proposed sales portion, while institutional investors were oversubscribed, he said.

"Since the book building process, local institutional investors, including mutual funds, provident funds and the Social Security Fund, have shown demand for more than the offered units," said Mr Varah.

To comply with the government's policies to allow general investors to have an investment alternative with stable returns and growth potential, TFFIF units will be offered under a small-lots-first basis to retail investors, who have been allocated 2.3 billion units, he said.

Cornerstone investors took up 1.81 billion units of TFFIF and the Finance Ministry bought 357 million units.

TFFIF will initially invest in a 30-year right to earn 45% of future revenue from Chalong Rat Expressway and Burapha Withi Expressway, both owned by the Expressway Authority of Thailand.

Proceeds from the fund's IPO will be used to finance construction of the expressway linking Rama III Road-Dao Khanong and the Western Outer Ring Road, worth 30.4 billion baht, as well as the third stage of the long-delayed northern expressway linking the Kasetsart intersection and Nawamin Road, also known as the N2 section, worth 14.4 billion baht.

Mr Varah said retail investors who failed to receive all the TFFIF units they subscribed to, or whose books were denied, will receive their money back within three days after the allocation list is announced.

State Enterprise Policy Office director-general Prapas Kong-Ied said retail investors' subscriptions for TFFIF numbered 41,200.

Chavinda Hanratanakool, chief executive of Krungthai Asset Management (KTAM), said TFFIF will start trading on the Stock Exchange of Thailand on Oct 31.

KTAM is acting as the fund manager.

The infrastructure fund has a policy to pay dividends at least twice a year, with a payout ratio of no less than 90% of the reviewed net profit, she said.

TFFIF's dividend payment to retail investors will be exempt from withholding taxes for eight years, Mrs Chavinda said.

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