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| IHH Healthcare | |
| Size | $2.1 billion IPO (Malaysia) |
| Joint coordinators | BAML, CIMB, Deutsche Bank |
| Bookrunners | Credit Suisse, DBS Bank, Goldman Sachs |
| return to the Asia Deals of the Year index | |
Large IPOs in Asia last year were something of a rarity. The $2.1 billion July IPO of IHH Healthcare was the largest-ever healthcare IPO in Asia. It was also noteworthy for its concurrent listing on two exchanges in the rising Asean region. And it posted good aftermarket volumes on both, with one-month average daily trading volume of $6.8 million on the Bursa Malaysia and $2.3 million on the Singapore Exchange, the venue for its secondary listing.
The deal was one of the most oversubscribed in Asia in the past three years, with a subscription rate of more than 132 times for the institutional tranche.
Work on the IHH Healthcare IPO started around February, as market conditions provided plenty of early cause for concern. As Pandit puts it: “We were working within a tough climate and a fragile market, and all involved realized it was necessary to focus on cornerstone investors to ensure a successful transaction.”
The transaction attracted a wide range of investors despite the unsettled IPO market. “From the get-go, we spent time setting up cornerstone investors and working with the management of the company. By putting in place big-name cornerstone investors, the syndicate really offset a lot of the risk. Having a lot of cornerstone investors in place really made the deal stand out compared with others,” says Pandit.
Nicholas Lee, head of Asia Pacific equity syndicate at BAML, says: “On the first day of trading the IHH Healthcare performed exceedingly well and it has continued to do so. There has been a tendency over the last year for IPOs to perform well initially but then to fizzle out. But the quality of the company is second to none.”
He adds that a key ingredient in the success of the deal was the amount of effort put into the marketing. IHH Healthcare is not necessarily the most obvious company to stage a bumper IPO. It is a complicated business with a complicated structure. Parts of the business are placed in Malaysia, others are in Singapore and even Turkey.
The cornerstone process lasted for about six months. Joint coordinators on the deal were not allowed to step on each other’s toes, or to overlap in any way.
The success of the secondary listing in Singapore surprised even some insiders. “We assumed only nominal interest there, but this wasn’t the case. There was a lot of retail interest in the IPO out of Singapore, due in part to the convenience of the investment and the fact that some retailers wished to have their assets in Singapore dollars”
