Shares of Medilines Distributors Inc., a distributor of medical equipment in the country, fell on its debut on the Philippine Stock Exchange (PSE), as investors decided to sell their holdings over fears of the omicron variant of Covid-19.
Shares of Medilines, trading under the symbol “MEDIC,” declined to P0.69 per share, or 30 percent, to close at P1.61 from its IPO price of P2.30 apiece on Tuesday.
“Overall, the company is solid. The selling today was overdone,” Luis Limlingan, managing director at Regina Capital and Development Corp. said.
Limlingan said Medilines did its book building and pricing process when the main index was at 7,400-point level, but many panic sellers failed to get out of the market when the index fell to 6,900 points.
“I think it [the fall in share price] is more of a sentiment. We are at a net foreign selling because of the omicron, so maybe that’s the effect,” he said.
The benchmark PSE index was up on Tuesday by 16.56 points to close at 7,147.30. Total value of trade reached P7.86 billion, but foreign investors were net sellers at P259.7 million.
“Medilines is the first company to be listed in the PSE that deals directly with the healthcare industry. It is no wonder then that Medilines’ IPO had an overwhelming reception as its total offer was 2.5 times oversubscribed. The Local Small Investor tranche of the offering at PSE EASy was likewise oversubscribed thereby providing Medilines with 2,889 retail investors from 64 provinces, 16 countries and one territory,” PSE President and CEO Ramon S. Monzon said.
Demand for the IPO exceeded P4.7 billion on the back of strong demand across all tranches, resulting to an oversubscription 2.5 times the offer size of P1.9 billion, the company said earlier.
The company has offered up to 550 million primary common shares and up to 275 million secondary shares.
“The initial public offering of Medilines comes at an opportune time as the global healthcare system takes center stage due to the pandemic. I am pleased that the PSE was able to serve as the company’s partner in its fund-raising activity. I hope that Mediline’s IPO will encourage other companies supplying products and equipment to the healthcare industry and especially those principally in the healthcare space to likewise consider tapping the equities market for capital,” Monzon said.
“It was a pleasant surprise to see overwhelming interest from a diverse set of investors – spanning from high quality, long-only domestic institutional investors and thousands of Filipino retail investors from across the world,” Medilines Chairman Virgilio B. Villar said.
Villar is the younger brother of businessman and former politician Manuel B. Villar Jr.
Part of the proceeds from the IPO will be used by Medilines for its foray into the high-growth, high-margin medical consumables business to support the growing industry.
Founded in 2002, Medilines plans to expand its presence and product portfolio to help enhance the country’s healthcare system through quality medical devices.
The company’s revenues for the first semester of 2021 jumped to P815 million which is higher by 281 percent year-on-year. Net income during the same period in 2021 was at P100 million which is equivalent to almost double of the net income posted for full-year 2020. The company attributes the profitability growth to the increase in the sales of cancer therapy machines.