Vinhomes launches Vietnam's biggest equity issue in choppy markets - term sheet

SINGAPORE (Reuters) - Vinhomes JSC, the residential property developer of conglomerate Vingroup JSC VIC.HM, launched an equity issue of up to $1.4 billion on Monday, making it the country's biggest-ever IPO in a market, drawing strong interest from global and local funds.

The issue eclipsed an equity offering from Vietnam Technological and Commercial Joint Stock Bank, which was priced at the top-end of an indicative range and raised roughly $922 million last week.

Shares of Vinhomes are being marketed in a range of 110,500 Vietnamese dong to 114,700 Vietnamese dong per share ($4.85-$5), implying a market value of $13 billion to $13.5 billion for the company, which is betting on an increase in home sales in one of Southeast Asia’s fastest growing economies, the term sheet showed.

There was no response from Vinhomes to a Reuters query sent on a market holiday.

The IPO comes at a time when Vietnam’s markets have dropped as much as 15 percent from record highs hit earlier this month, but analysts view the correction to be short-lived.

Vinhomes says it is the dominant player in the high-end property segment in Hanoi and Ho Chi Minh City, with a 48 percent market share and an overall market share of 15 percent across all residential segments.

Local and global investors have agreed to take in about three-quarters of the initial equity offering, underscoring huge support for the issue, the term sheet showed.

Earlier this month, Singapore wealth fund GIC [GIC.UL] came in as a pre-IPO investor and took a roughly 7 percent stake for about $853 million by buying shares from Vingroup and other shareholders.

Vinhomes’ IPO, which will be listed on the Ho Chi Minh Stock Exchange, will rank the company among the biggest listed local firms. The issue consists of secondary shares.

Vinhomes is majority-owned by Vingroup, the country’s biggest conglomerate, which operates in real estate, education, healthcare, entertainment, retailing and automobile manufacturing sectors.

Roadshows for the issue kicked off in Hong Kong on Monday, followed by London, New York, Singapore and Boston, the term sheet showed. The shares are set to be priced on May 7 and expected to be listed on May 17.

Reporting by Anshuman Daga; Editing by Sherry Jacob-Phillips