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The stock of the Bangkok-based Thai Life Insurance Plc traded at 15.90 baht, down by 0.6% from its initial public offering (IPO) price of 16 baht, on its first day of trading on July 25. Thai Life Insurance had the largest public issue in Bangkok since microfinance firm Ngern Tid Lor Pcl was listed 14 months ago.
The Thai insurer sold 2.1 billion shares, about 18.8% of total shares, as well as a greenshoe option of 161.3 million shares. The company stated that the IPO proceeds would be used to provide working capital, support digital transformation, and strengthen distribution channels with partners.
Thai Life had a 12.9% market share in total premiums till March 2022 and made net profits of 3.8 billion baht in the first quarter of this year.
The company was targeting to raise 37.1 bn baht ($1 bn) after two of its major shareholders V.C. Property Co and Her Sing (HK) Ltd. sold a total of 2.32 billion shares. As per the terms of the deal, cornerstone investors including GIC Private Ltd. and Oaktree Capital Management were allotted 467 million shares. Whereas most of the commitment came from domestic buyers.
Significance of Thai Life Insurance IPO
Globally, IPO proceeds have fallen as a surge in inflation, rising interest rates, and volatility in equity markets have kept new issuers on the sidelines. However, Thai Life’s listing may open the door to larger transactions in Southeast Asia’s second-largest economy, with firms such as SCG Chemicals Pcl, a subsidiary of Siam Cement Pcl, and meat producer Betagro Pcl planning to go public soon.
“We also believe the IPO will benefit the overall local life insurance industry because of higher accountability and transparency, as TLI (Thai Life Insurance) is the second-largest life insurer in the country,” Fitch Ratings said in a report.
– reporting by Sakshi Dahiya, edited by Sumeet Gaikwad
