The share price of Converge ICT Solutions Inc. fell 9.4 percent in its market debut at the Philippine Stock Exchange Monday, after raising P29.1 billion in proceeds from the initial public offering to fund the rollout of its fixed broadband until 2025.
Converge ICT’s stock closed at P15.22, down from the IPO price of P16.80.
Converge ICT founder and chief executive Dennis Anthony Uy said in a virtual press briefing the company decided to push through with the IPO despite the pandemic because it would provide funds to support the company’s growth trajectory and capture a substantial market share.
“We celebrate our successful IPO today as a significant milestone for the company and as evidence of our strong operational and technological capabilities. We are fully committed to building the largest fiber broadband network in the Philippines and to providing affordable and reliable high-speed internet connectivity to millions of Filipinos nationwide. Our extensive, proprietary end-to-end fiber broadband network will enable us to support the digitalization of the Philippine economy,” Uy said.
Uy said the low broadband internet penetration rate and the strong demand for faster internet connection in the country during the pandemic offer good opportunities for the company to further accelerate its business.
Converge ICT co-founder and president Grace Uy said the sector had reached an inflection point with fiber broadband penetration set to at least triple in five years.
“We are uniquely positioned to continue capturing a lion’s share of this market given our pure play focus, extensive network and differentiated offering—these advantages cannot be replicated,” Grace Uy said.
The company had a base of 730,000 residential subscribers and 10,000 corporate subscribers as of end-June.
Converge ICT plans to roll out its fiber network to 55 percent of Filipino households by 2025.
The IPO offering was strongly received by local and foreign investors. The offering was oversubscribed and drew high-quality foreign investors, including OMERS, Genesis, Thornburg and Macquarie.
It also secured over P4.85 billion of domestic demand, making it one of the largest domestic IPO take-ups in the country.
Finance Secretary Carlos Dominguez III said the planned telecommunications infrastructure expansion of Converge ICT following its market debut would significantly contribute to the country’s strong economic recovery from the pandemic and quicken the transition to the digital-based “new economy.”
Dominguez said the IPO and listing were a “strong vote of confidence in the economy’s capacity to bounce back strongly after the difficulties brought by the COVID-19 pandemic.”
“I encourage Converge to use the proceeds of this public offering to continue investing in network improvements to serve more Filipinos nationwide,” Dominguez said.
“We will count on your company to help us bridge the digital divide as we purposely move forward to a new economy,” he said.