Ayala, MUFG investments to boost GCash’s planned IPO — analysts
By Ashley Erika O. Jose, Reporter
THE FRESH investments by Ayala Corp. (AC) and Japan’s Mitsubishi UFJ Financial Group (MUFG) in Globe Fintech Innovations, Inc. (Mynt) may help enhance GCash’s operational capabilities and stimulate investor interest in its planned initial public offering (IPO), according to analysts.
“The investments from Ayala Corp. and Japan’s MUFG are expected to propel GCash to new heights by accelerating its growth and innovation, enhancing its service capabilities, and solidifying its position as a leading fintech (financial technology) player in the Philippines’ digital economy,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a Viber message on Sunday.
G-Xchange, Inc. is the operator of GCash. The parent firm of GCash, Mynt, is an affiliate of Ayala-led telecommunications company Globe Telecom, Inc.
In a stock disclosure on Friday, Ayala Corp., through its unit AC Venture Holdings Corp., announced it is increasing its ownership in Mynt by acquiring an additional 8%, raising its overall share to 13%, for P286.4 billion.
It also noted that Ayala Corp.’s board of directors approved the transaction on July 30.
“AC’s strategic priority is to rationalize its portfolio and reallocate capital to clear business winners. The increased stake in Mynt allows AC to further benefit from GCash’s success and strong long-term growth potential,” Ayala Corp. said.
Separately, Mynt said it has also secured funding from Japan’s MUFG, more than doubling its valuation to $5 billion from its $2-billion valuation in the 2021 funding round.
“This strategic move underscores confidence in GCash’s business model and highlights the increasing importance of fintech solutions in promoting financial inclusion in the region,” Mr. Del Castillo said.
Mynt said MUFG, through its unit MUFG Bank, Ltd., has also entered into a binding agreement to invest in Mynt, acquiring an 8% stake in the company.
“We are thrilled to welcome MUFG as a new strategic partner. With their global expertise and reach within the financial inclusion space, they will be instrumental in further expanding GCash’s social impact, especially to the underserved,” Mynt President and Chief Executive Officer Martha Sazon said.
The new investments signify confidence in the growth trajectory of GCash, Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said.
In January, the electronic wallet platform said it is working to be ready for its IPO target.
“The entry of MUFG has a halo effect on Mynt that could boost its future IPO. The expectation is that the IPO will be priced higher than the latest valuation of $5 billion,” Mr. Colet said.
He said that these investments could enhance investor interest, potentially positioning GCash’s planned IPO as the largest in the Philippines.
“Assuming they decide to list in the local market. However, the higher valuation also bolsters the view that it might make more sense for Mynt to list in a major stock market abroad where there is better liquidity and appreciation for high-growth fintech companies,” Mr. Colet said.
Mr. Del Castillo said the move is a strategic investment that could bolster market appetite and drive confidence in GCash’s plans to list on the stock exchange.
“The strategic investments in GCash by both companies are likely to significantly enhance investor confidence in the company’s potential for a successful IPO by bolstering its credibility, financial strength, growth prospects, and overall market perception,” he said.
At the local bourse on Friday, shares in Globe climbed P56, or 2.59%, to end at P2,218 apiece.