PE-backed Vincom Retail ups size of IPO to raise $740m

The company sold 415 million shares at VND40,600 apiece, securing a partial exit for Warburg Pincus, which is understood to have exited about two-thirds of its holding. Cornerstone investors covered 58.8% of the offering, while the non-cornerstone allotment was five times over-subscribed. Vincom Retail is worth more than VND77 trillion based on the IPO price. Trading will begin on November 10.

Prior to the offering, the selling shareholders owned 27% of Vincom Retail, while property developer Vingroup had 58.9%. A Warburg Pincus-led consortium invested $200 million in the company in 2013 for a 20% stake and then contributed another $100 million in 2015. The following year, Vingroup injected $390 million into the business. 

“This is truly a landmark transaction for Vietnam. Over four years ago, we had a vision to work with Vingroup to create a best-in-class fully integrated modern retail platform with a dominant presence across Vietnam.  Today, the company’s unrivaled scale and nationwide reach make it the partner of choice for retailers and brands looking to tap into Vietnam’s rapidly expanding middle class and emerging consumption,” said Jeffrey Perlman, head of Southeast Asia at Warburg Pincus, in a statement.

Vincom Retail claims to be Vietnam’s largest shopping mall developer, with a 60% market share in Ho Chi Minh City (HCMC) and Hanoi. Retail space per capita in these cities is still only about one-seventh that of Jakarta or Manila. Sales through retail outlets in Vietnam as a whole came to $52.6 billion in 2016 and the total is projected to reach $66.5 billion by 2020.

Vincom Retail was incorporated in 2012 and Vingroup transferred three properties into its portfolio in 2013. As of September, the company owned and operated 41 malls across 22 cities with a total retail gross floor area of more than 1.1 million square meters. It had a further 73 identified pipeline projects – of which 22 are under construction – and wants to reach 200 malls by 2021.

When Warburg Pincus made its first investment, Vincom Retail had seven malls – including two that were scheduled for launch – valued at about $1.1 billion. The aim was to build 25-30 new properties over 4-5 years, expanding the company’s footprint from HCMC and Hanoi into second-tier cities.

This was Warburg Pincus’ first deal in Vietnam and it is also the firm’s debut exit in Southeast Asia.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• IPO
• Consumer
• Real estate
• Vietnam
• Exit
• Warburg Pincus Asia