Thursday, September 13, 2012

Third Largest IPO 2012 - Religare Health Trust

So, the anticipated third-largest IPO this year will finally be underway. It is none other than Religare Health Trust, aiming to raise $500 million in a initial public offering on the SGX. [Reuters link; Today online link

Here are some important details about the IPO that are available at the moment

  • $500 million to be raised to reduce debts
  • Medical and healthcare assets
  • End Sept is the rumored listing period
  • Business trust style
  • Minimum dividend yield of 8.5% (impressive number but more details required on its sustainability and conditions)
  • Assets taken from Fortis Health Care Group; aim to buy third-party assets in future
  • Religare Capital Markets, Citigroup, Nomura, Standard Chartered and CIMB are acting as the IPO's bookrunners

Of course for now, details are sketchy and as much as you and I can guess from these few news sources. But on first impression, it does seem somewhat similar to that of Ascendas Hospitality Trust that listed last month in the second-largest IPO this year. Impressive dividend yields but somewhat not a very compelling investment given the IPO proceeds are mainly to service debts. Nonetheless, instutitional response over the next few weeks will give a better indication of its market depth and more details along the way will definitely help to make a better judgement. 

On a side note, it is interesting to note that none of the IPOs that listed on the SGX this year had made a loss on the first trading day. The best performers were Neo Group (Catalist listing) with a first day return of 55% on its offer price and Civmec (Mainboard listing) with a gain of 39%. The worst performer was Ascendas Hospitality Trust with a return of 0% on its first day's closing price.

For more statistics such as the one above on the performance of this year's IPO, do head to the dedicated IPO SG Statistics section of this blog.

Happy and healthy trading!

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