Religare enters Philippines’ joint venture

The Indian financial services group has linked up with FSG to snag more mandates from mid-sized companies looking to raise capital on the country’s soaring stock market.
Manila skyline
Manila skyline

Indian financial services firm Religare Enterprises has sealed an investment banking partnership with Manila-based FSG Capital to help mid-sized companies in the Philippines raise capital as the stock market soars.

While the Philippine Stock Exchange logged some hefty equity placements last year, all of the initial public offerings were in the small- to mid-cap space. There were a total of five IPOs during 2014 with an average size of just $63 million. 

Religare’s investment banking unit Religare Capital Markets led by Sutharshan Kandiah signed the memorandum of agreement with FSG Capital, to beef up its platform in the Philippines. Religare said the tie-up is the first by an Indian-headquartered investment bank in the country. 

The move is part of Religare’s efforts to expand in Asia. It already owns a controlling stake in Bartleet Securities in Sri Lanka and is exploring growth initiatives in Bangladesh, Vietnam and Myanmar.

Religare has worked on deals in the Philippines before: it was joint global coordinator, international bookrunner international lead manager for Travellers International Hotel Group’s $474 million initial public offering; joint placement agent for Philweb’s $50 million offering; co-bookrunner for the $155 million placement of shares in Puregold Price Club share capital; and international co-lead manager for the $65.3 million qualified public offering of STI Education.

Religare is also in the syndicate for the proposed follow-on offering of Global Ferronickel Holdings.

FSG Capital’s chairman and president Mark Frondoso was formerly the head of Morgan Stanley’s representative office in the Philippines and before that an associate director of Barclays capital based in Hong Kong.

Through FSG Capital and related entities, he acquired the Philippine distressed assets business of Standard Bank of South Africa in 2014 and is also the Philippine partner of Home Credit B.V., a mass-market consumer finance provider.

Commenting on the rationale behind the tie-up, Frondoso said: “Our combined domestic platform makes available – to both existing and emerging mid cap enterprises – more options and greater flexibility as they seek cross border M&A opportunities and funding from the international capital markets.”

Religare’s is present in six countries in the Asia-Pacific region as well as London and Dubai.
Religare’s services include institutional equity sales, special situations, equity research, equity capital markets, private financing and mergers & acquisitions advisory.

Looking ahead at the IPO pipeline, the next mid-cap deals to hit the market could be a P7.7 billion offering for real estate company Profriends Group and the likely listing of Asiawide Refreshments, which is the licence holder of RC Cola in the Philippines. 

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