Binh Son Refining and Petrochemical Co., Ltd. (BSR) would have made more on its initial public offering (IPO) if it had been evaluated more accurately.


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As recently released by BSR, during March 31-April 9, 2017, State Audit Office of Vietnam (SAV) audited the firm's valuation. Accordingly, SAV found that the firm’s real valuation is VND5.3 trillion ($232.8 million) or 7.94 per cent higher than the published figure. VND4.894 trillion ($214.96 million) of this VND5.3 trillion ($232.8 million) is the increase in fixed assets and VND53.7 billion ($23.58 million) is the increase in the valuation of BSR’s brand value.

Along with the addition of VND5.3 trillion ($232.8 million) to the firm’s real valuation, SAV stated that the real valuation of the state-owned stake is VND4.5 trillion ($197.66 million) or 11.37 per cent higher than the published figure.

However, according to SAV’s conclusion, BSR will have to pay an additional VND51 billion ($2.24 million) of corporate income tax to the government and an additional VND724 billion ($31.8 million) of profit to its parent firm PetroVietnam.

As the valuation of a firm is an important factor in determining the starting price at an IPO, BSR may stand to make a lot more in proceeds in January. The higher real valuation would boost the starting price.

On January 17, BSR conducted its IPO, selling 242 million shares, equalling 7.79 per cent of its charter capital, at the initial price of VND14,600 ($0.64) apiece. As a result, 623 of the 4,079 registered investors won at the auction, including 62 organisations and 561 individuals. 147.83 million shares, equalling 61.2 per cent of the offered share volume, were bought by foreign investors.

The average selling price was VND23,043 ($1.01), 57.8 per cent higher than the initial price. The lowest selling price was VND20,800 ($0.92). Of particular note, an individual investor succeeded in buying 10,000 shares at the record price of VND14.8 million ($651.69) apiece.

After the IPO, BSR earned VND5.57 trillion ($245.26 million) in proceeds, 1.5 times higher than its expectations.

BSR’s IPO reported a record in the number of investors registering to join the auction with over 4,000, as well as in the registered shares as over 651.78 million shares were registered to be bought, 2.7 times higher than the offered volume.

VIR