After getting listed on Nasdaq through a SPAC merger worth $40 million earlier in the week, the ride-hailing to delivery giant of Southeast Asia – Grab Holdings, is reported to be considering a secondary listing in its home market of Singapore, said a report published by the news agency Reuters quoting information from sources with knowledge of the matter.
The logic of the company to get listed on Singapore Exchange is that this will allow the firm to have access to an investor base close to where its regional business is based, while also potentially given the opportunity for its customers, drivers and merchant partners to easily trade its shares if they so wanted, said the report quoting sources.
There were no comments in the report from Grab and SGX.
“For the right issuer, a secondary listing could well be a good move. You can get the best of both worlds,” said Raymond Tong, capital markets and M&A partner at law firm Rajah & Tann Singapore.
“If your home markets are in this region, a Singapore listing can help you tap another pool of investors as there are many family offices and funds based in Singapore,” said Tong.
Earlier this week, Grab completed a $40 billion merger with Altimeter Growth Corp., a special purpose acquisition company (SPAC), which was the largest ever SPAC deal.
Raising $4 billion from investors including BlackRock (BLK.N), Temasek Holdings, Fidelity International, Malaysia’s Permodalan Nasional Bhd and some of the richest family groups of Indonesia is the target of Grab as a part of the transaction.
Having initially launched a ride hailing business in 2012, Grab currently is operational in eight countries and in more than 400 cities. Since it was founded, the company has ventured diversified into delivering food and grocery while also venturing into the area of digital payments. It won a digital banking licence in Singapore last year.
The report did not mention anything about the amount of money that Grab was looking to generate from the secondary listing and the financial terms and timetable of the potential listing were still in early stages.
The company is currently worth about S$74 billion ($55.4 billion) by capitalisation and has the highest valuation on the Singapore bourse is bank DBS Group Ltd.
For SGX, Grab’s listing would be a big win even though the company has sufficient cash reserves and could only decide to raise only a small amount of cash from Singapore listing, said reports quoting sources.
Large IPOs from real estate investment trusts have only been made on the SGX. Low liquidity and valuations has been the issue for the exchange because it has a small base of retail investors in the city-state. In recent times, there has been a series of delistings. The impediments have also discouraged large regional high-growth companies from getting listed at the exchange.
Companies listed at the SGX have raised four times more funds from secondary listings compared to primary listing over the past three years.
(Adapted from Reuters.com)