One speeds up, the other is cautious.

Raising capital on the stock market is still an effective channel for many businesses. However, real estate businesses are still cautious when stock prices are not favorable.

Raising capital through the stock exchange: Some accelerate, others are cautious

Raising capital on the stock market is still an effective channel for many businesses. However, real estate businesses are still cautious when stock prices are not favorable.

In the securities industry, more than a dozen companies will complete capital increases in 2024. Photo: Duc Thanh

Real estate group postpones plans to wait for… time

For the second consecutive year, the plan to issue shares of the Construction Development Investment Joint Stock Corporation (DIC Corp, code DIG) had to be abandoned. In this capital increase, DIC Corp plans to offer an additional 200 million shares to existing shareholders. With an issue price of VND15,000/share, DIC Corp can mobilize a maximum of VND3,000 billion, expected to be allocated to the Cap Saint Jacques Complex Project (VND1,135 billion), the Vi Thanh Commercial Residential Area Project (VND1,426 billion) and to pay off bond obligations.

The above decision of the Board of Directors of DIC Corp was made less than 2 weeks after the State Securities Commission granted the certificate of registration for the share offering. DIC Corp even published a prospectus to send to shareholders. "The suspension of the issuance is to ensure the interests of shareholders in unfavorable securities conditions," the Board of Directors' Resolution stated.

It is known that DIG stock price is at its lowest price since April 2023. Instead of raising capital, DIC Corp's cash flow is expected to come from asset sales. DIC Corp decided to sell up to 16.2 million DC4 shares of DIC Holdings Construction Joint Stock Company to restructure its investment portfolio, expected to earn more than VND 200 billion.

In addition, according to information in mid-December 2024 from this enterprise, DIC Corp plans to sell 599 plots of land in Vi Thanh Commercial Residential Area with complete legal procedures including site clearance, issuance of land use right certificates and completion of financial obligations.

DIC Corp is not the only case of "stopping" capital increase plans. Notably, these cases are all in the real estate group. In September 2024, Hai Phat Investment Joint Stock Company had to stop the plan to offer more than 152 million shares to existing shareholders to ensure shareholder benefits due to unfavorable market conditions and to ensure feasibility.

In December, the Southern Hanoi Housing and Urban Development Investment Corporation stopped its capital raising plan. Previously, this enterprise had finalized a plan to offer shares to the public at a ratio of 100:20, price of 10,000 VND/share, implementation period from the fourth quarter of 2024 to the first quarter of 2025. With nearly 88.35 billion VND expected to be mobilized, the Corporation will use 50 billion VND to invest in project construction, 30 billion VND to pay debts and nearly 8.35 billion VND to supplement working capital.

According to the leaders of Nam Ha Noi Corporation, the change in the offering plan is to suit the current production and business situation, capital mobilization and capital use plans in the coming time. The cash flow of the Corporation is not affected. As for the business plan, the Corporation has also exceeded the profit plan by 6% since the end of the third quarter of 2024.

Still has many bright colors

According to the data reported at the 2024 Annual Review Conference of the State Securities Commission, the total capital mobilized through stock offerings and bond offerings by public companies as of November 30 was VND173,052 billion. The actual capital mobilization picture is not too gloomy as businesses in many fields are still successful in the primary market.

Consecutive issuances through private placements and public offerings have been completed with a very high success rate for shareholders. In the securities industry alone, more than a dozen companies have completed capital increases in 2024. Most recently, Kafi Securities Joint Stock Company completed the offering of 250 million shares to existing shareholders at VND10,000/share on December 17. Accordingly, Gentle Sun Investment continues to contribute capital and maintain a 20% ownership ratio at Kafi, while Uniben is no longer on the list of major shareholders after the issuance.

Masan Consumer's share offering plan is more attractive as MCH shares are in the process of moving from UPCoM to HoSE. If successful, this could also be a boost for the integration of IPO and stock listing activities - one of the contents stated in the Draft Amendment to Decree 155/2020/ND-CP detailing the implementation of a number of articles of the Securities Law, which is being consulted by the Ministry of Finance and the State Securities Commission.

A month ago, SSI Securities Corporation also distributed all of its 151.1 million shares to existing shareholders by exercising purchase rights. Thanks to this capital increase, the company raised its capital to nearly VND20,000 billion and regained its number one position in terms of charter capital.

However, the above “throne” may soon be transferred back to Techcom Securities Joint Stock Company (TCBS) when this company has just been approved for a private issuance plan for 25 individuals. With a total of 118.8 million shares, priced at VND11,585/share, the amount TCBS collected was VND1,376.7 billion; the charter capital increased to VND20,801.5 billion.

New plans are still being continuously launched by many securities companies, showing that this wave of capital increase has not cooled down, such as the plan to offer nearly 360 million shares of Ho Chi Minh City Securities Corporation (HSC) approved in early December 2024.

According to Mr. Dao Hong Duong, Director of Industry and Stock Analysis, VPBankS Research, the outstanding customer loans (margin) of the whole market reached a record high (VND232,000 billion), up 20% compared to the Covid-19 period. The growth rate in asset value of securities companies is funded by additional capital contributions from shareholders and investors. The growth momentum for industry profits is also thanks to this significant increase in capital.

Many manufacturing enterprises have also announced plans to raise capital worth thousands of billions of VND. According to the plan approved by shareholders, the expected offering time is not far away, in the fourth quarter of 2024 or the first quarter of 2025, Vinpearl will issue 70 million shares. With an offering price of VND71,350/share, Vinpearl is estimated to raise nearly VND5,001 billion, if successfully distributed to shareholders.

Shareholders of Masan Consumer Corporation (Masan Consumer, code MCH) have finalized a plan to offer shares to existing shareholders at a rate of 45.1%, equivalent to 326.8 million new shares. Masan Consumer is expected to raise the largest amount of capital since its listing, with VND3,268 billion, and increase its charter capital to over VND10,623 billion.

Raising capital on the stock market is still an effective channel for many businesses. However, real estate businesses are still cautious when stock prices are not favorable.

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