Upson International’s IPO is TODAY

My conclusion based on these anonymous and unconfirmed survey results is that UPSON’s IPO is not likely to be met with much retail demand when it goes to market

Upson International [UPSON 2.40] will commence life on the PSE this morning after a very quiet offering period during which UPSON and UPSON’s owner, Lawrence O. Lee, raised PSE 1.65 billion by selling 687.5 million shares to the public. About 90% of the stocks sold were primary stocks. The IPO has a stabilization fund (operated by First Metro Securities Brokerage).

MB Allocation Survey: Thanks to the 41 Barkadans who responded to the MB Allocation Poll, we can better understand demand for UPSON shares during the IPO offering period, and that may give us an indication of how UPSON might be received when it later goes live goes tomorrow.

86% overall grant rate: The 41 Barkadans claimed to have requested a total of 2,304,240 pesetas in UPSON shares and reported that they received 1,992,480 pesetas of this request in actual allocations. That is an association rate of 86%. Anything below 100% tells us that some stocks may be oversubscribed.

Top 3 brokers: A look at the top 3 brokers used to buy the shares tells a more complete story. The most popular way to purchase UPSON stock was through the PSE EASy platform, where Barkadans received an attribution rate of 100%. Next came COL Financial with an allocation rate of 34%. In third place was Abacus Securities with an allocation rate of 100%.

MB bottom line

The full allocation of PSE EASy requests suggests (to me) that retail demand has been weak for this IPO.

While one could point to the low allotment rate for the COL Financial inquiries as evidence of demand, brokers have complete discretion in how they allocate their IPO quotas, so what a broker does is not necessarily indicative of the group as a whole is.

COL Financial could have simply allocated larger UPSON allocations to its preferred customers, with the high number of partial allocations to “smaller” customers being a natural consequence of this business decision.

When there is a real oversubscription situation, Barkadans will usually report that most brokers have only provided partial allocations in the 50-75% range.

Here, as the 3rd largest source (Abacus Securities) provides 100% attribution, this appears consistent with PSE EASy’s full attribution, together suggesting that the COL financial result is an outlier.

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My conclusion based on these anonymous and unconfirmed survey results is that UPSON’s IPO is not likely to be met with much retail demand when it goes to market. Thank you for your participation! Congratulations to the winner of the raffle!

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