Int’l Investors Snap up VietJet’s IPO Shares

Tuan Minh

10:54 19/12/2016

BizLIVE - Around 30 foreign institutions have bought out 44.8 million shares of Vietnamese budget carrier VietJet Air.

Int’l Investors Snap up VietJet’s IPO Shares

Nguyen Thi Phuong Thao, founder and CEP of VietJet Air. Photo: Internet

Around 30 international investors have snapped up 44.8 million shares Vietnam’s sold privately-run carrier VietJet Air has launched for sale at its recent initial public offering (IPO), local media reported.
The buyers, including Morgan Stanley, GIC, Dragon Capital, Mirae and VinaCapital, bought the shares at 84,400 dong ($3.72) each, valuing the carrier at $1.2 billion. The shares were 1.8 times oversubscribed.
VietJet Air booked proceeds of an estimated $170 million from the sale. The budget carrier will offer another 3.5 million shares to retail investors at a price of 86,500 dong ($3.81) each.
After the IPO, VietJet will list its shares on the Ho Chi Minh Stock Exchange at the end of February next year, said Phung Thi Tan Thanh, deputy director of investment banking at Viet Capital Securities, one of the four advisors to the IPO, alongside BNP Paribas, Deutsche Bank and JP Morgan.
Prices of VietJet shares on the Over-the-counter market move between 96,000 dong ($4.2) and 100,000 dong ($4.4) each.
To Which VietJet’s Stock Owes its Appeal?
The appeal of VietJet shares comes from its fast growth since its inception in late 2012, with its domestic market share soaring to 37.1% at end-2015 and further to 43.1% in June 2016. With this pace, the no-frills airline is expected to soon surpass flag carrier Vietnam Airlines.
VietJet now operates 57 air routes, including 37 domestic ones and 20 overseas. To accommodate its growth, the airline has placed orders worth billions of USD to acquire airplanes from Boeing and Airbus.
The carrier earned a net profit of 1.24 trillion dong ($54.5 million) in the first half of this year, compared to the whole-year target of $100 million.
With nearly 350 million shares to be floated and a price of 86,000 dong each, VietJet’s price-to-earnings ratio (P/E) is projected at 8-9 times in 2017, a quite attractive level, according to financial website
IPO Turns VietJet’s CEO into Vietnam’s First Female Billionaire
According to Zing News, Soviet-trained Nguyen Thi Phuong Thao, founder and CEO of VietJet now holds a 24.92% stake in the carrier, being its largest stakeholder.
Together with the ownership of companies under her umbrella, her holding in VietJet Air JSC, which has a registered capital of three trillion dong ($132.2 million), stands at 83.25%, which is valued at nearly $1 billion.
With the IPO, Thao has become the first female billionaire in Vietnam. Pham Nhat Vuong, chairman of Vingroup -- the largest real estate developer and retail operator in the country -- has been listed by the Forbes Magazine the No. 1 billionaire for several consecutive years.