Maynilad Water Proceeds With IPO Amid Weak Philippine Market Sentiment

Maynilad Water Services—a unit of Indonesian billionaire Anthoni Salim—backed Metro Pacific Investments—will raise up to 28.5 billion pesos ($490 million) from its maiden share sale after setting the IPO price at 15 pesos a share.

The IPO would be the biggest in the Philippines since instant noodle giant Monde Nissin raised $1 billion from its maiden share sale in 2021.

Maynilad Water is selling as many as 1.9 billion shares, including 249,047,600 primary common shares for over allotment and 24.9 million common shares that will be sold to Salim’s First Pacific, a major shareholder of Philippine conglomerate Metro Pacific.

The company—which provides water utility services to 17 cities and municipalities in western Metro Manila and parts of Cavite province, south of the capital—said in its prospectus filed earlier this month that it was aiming for a maximum IPO price of 20 pesos apiece.

Despite attracting cornerstone investors such as the International Finance Corp. and the Asian Development Bank, which committed to buy shares worth $245 million at 15 pesos each, the stock is likely to struggle in the short to medium term as a government corruption scandal involving supposed flood control projects that weren’t delivered by contractors who allegedly gave kickbacks to politicians has soured market sentiment, according to some analysts. The benchmark Philippine stock index has fallen almost 7% this year, making it one of the worst performing stock markets in Southeast Asia.

“The [corruption scandal] soured the appetite of many retail investors even though Maynilad is an attractive stock,” said Jonathan Ravelas, managing director at Manila-based consultancy firm eMBMS. “It’s hard to attract investors when you have a systemic issue of corruption in government.”

At 15 pesos a share, Maynilad is valued at 7.2 times estimated 2025 price to earnings, a premium over the 6.9 times multiple Manila Water—controlled by casino-to-ports billionaire Enrique Razon Jr.—is trading at, according to Benjamin Garcia, head of research at AP Securities.

“The offer is prudently priced and offers sufficient modest upside,” Garcia said. “Maynilad is a viable defensive and dividend play primarily due to its high earnings visibility and generous dividend policy.” Maynilad Water will start trading on the Philippine Stock Exchange on November 7.

Maynilad, which plans to use proceeds from the offering for capital expenditures and general corporate purposes, booked 7.5 billion pesos in first-half net income, up 19% from the same period in 2024.

The utility said in its prospectus that available cashflow for dividend payouts may “increase significantly” from 2028 onwards due to lower capital expenditure requirements. The company plans to distribute about 50% of its net income as annual dividend, according to its prospectus.

Aside from the sale of primary shares, Maynilad Water Holding—which counts Metro Pacific, tycoon Isidro Consunji’s DMCI Holdings and Japan’s Marubeni Corp. among its shareholders—plans to sell 354.7 million shares at the IPO price, raising an additional 7.1 billion pesos in a secondary offering.

Metro Pacific—which is helmed by CEO Manuel Pangilinan—also has interests in hospitals, tollroads, agriculture, as well as electricity generation and distribution. Besides Metro Pacific, Salim’s First Pacific also has stakes in Philippine telecom giant PLDT and Philex Mining Corp. With a net worth of $12.8 billion, Salim and his family are among the richest in Indonesia. The family also has stakes in Infofood, Indonesia’s largest noodle maker, as well as banking, retail and coal mining.