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Veam raises $96m in Vietnam's biggest IPO this year

[HANOI] Vietnam Engine and Agricultural Machinery Corp (Veam) raised 2.14 trillion dong (S$130.57 million) in the nation's largest initial public offering this year. While the result was less than what the state-owned company targeted, it continues the acceleration of IPOs in one of Asia's hottest markets.

The Hanoi-based company, known as Veam Corp, sold 149.5 million shares at an average price of 14,291 dong at an auction organised by the Hanoi Stock Exchange Monday, according to results posted on the bourse's website. It had offered 167.1 million shares, or a 12.57 per cent stake, at a reference price of 14,290 dong per share.

"With such a big IPO like this, selling about 90 per cent is still successful," said Nguyen Trung Kien, a Hanoi-based analyst at Saigon Securities JSC. "Also, at the reasonable reference price, investors who participate in the IPO can obtain high dividends after that," he said.

Vietnam has raised 5.29 trillion dong from IPOs of 58 state-owned enterprises in the first seven months of this year, 75 per cent higher than the same period in 2015, according to the State Securities Commission, as investors sought to tap one of the hottest stock markets. 

The benchmark VN Index rose 1.4 per cent at the midday break Monday, set for the highest close since February 2008.

Veam, which makes engines and agricultural machinery, automobiles and motorbikes, has forecast a dividend ratio of 18 per cent this year and 16 per cent for 2017, according to its sale document.

It also plans to sell a 36 per cent stake in itself to as many as three strategic investors in September, according to a statement on its website. 

The company has forecast after-tax profit of 3.5 trillion dong this year, 3.1 trillion dong next year and 2.3 trillion dong in 2018, according to its listing prospectus.