Securities firms back to capital raising race

While none too significant, some companies have announced plans for capital raising through additional share issuances after the 2023 Annual General Meeting of Shareholders.

Particularly, Techcombank Securities JSC (TCBS) set a key plan of releasing private shares worth more than VND10 trillion (USD426.3 million), with the issuance date starting from the end of the second quarter to the beginning of the thir quarter.

TCBS’s charter capital is now approximately more than VND1.1 trillion. If the plan is completed, the company’s charter capital will increase to about VND11.1 trillion, exceeding its equity to over VND21 trillion and listing TCBS in the top securities companies with the largest equity in the industry.

According to TCBS, this is a strategic step to make the company become the largest technology asset management company in Vietnam in terms of equity, profit and operational efficiency in core areas.

Tien Phong Securities Corporation is also expected to issue another 200 million shares to double its charter capital, from VND2 trillion to VND4 trillion, with two options. One is to issue stock purchase rights for existing shareholders, while the other is through private placement. The implementation date is set to be in 2023 or the first quarter of 2024.

Meanwhile, shareholders of Viet First Securities Corporation just approved a capital increase plan, expected to triple its size to more than VND2.4 trillion through private placement and share issuance at the ratio of 1:1. The securities firm plans to use the additional capital to serve proprietary trading and margin lending.

Vietcap Securities JSC also approved a plan to release more than 100 million shares to pay dividends at the rate of 30%, and 2 million ESOP shares at the price of VND12,000 a share. Once the issuance is successful, the charter capital of VCI will rise to more than VND5.38 trillion.

Similarly, VIX Securities JSC wants to issue more than 29 million shares to pay dividends for existing shareholders and more than 58 million bonus shares at the rate of 15%, if the issuance is successful, its charter capital will rise up to nearly VND6.7 trillion.

Even though it has not been officially announced, the leading broker, VPBank Securities is expected to issue ESOPs through a private placement in 2023.

As the market has not yet been active and the liquidity remains at low levels, plans to mobilize new capital from existing shareholders become more challenging. Therefore, most securities companies choose to offer private placements or issue shares to pay dividends to increase charter capital.

From 2021 to early 2022, when the stock market was booming, issuing new shares was the main momentum of securities companies’ capital-raising strategies due to the sudden high demand from investors.