MANILA - Converge ICT Solutions Inc's shares slumped in early trade on Monday after the Philippine fiber broadband provider completed a $600 million IPO, the country's second largest, despite market volatility amid the coronavirus pandemic.
Shares in Converge, which is relying on surging demand for fibre broadband due to remote working and studying during the pandemic, tumbled as much as 10.6 percent in the first hour of trade.
In comparison, the broader stock market index was trading nearly flat.
Converge, minority owned by U.S. private equity firm Warburg Pincus, plans to use a portion of the share sale proceeds to fund an ongoing $1.8 billion internet backbone expansion.
The company sold 1.73 billion shares, including an over-allotment, at 16.80 pesos apiece in the country's second-largest initial public offering (IPO), behind only Robinsons Retail Holdings Inc's $627 million share sale in 2013.
The valuation of Converge is justified by the company's high growth potential, Converge CEO Dennis Anthony Uy told ANC news
By 2025, Converge would offer services to 80 million of the country's 107 million population, he said.
To date, Converge has clocked up roughly 750,000 residential customers mostly in and around the capital Manila.