Southeast Asia online realtor PropertyGuru bows out of IPO

Private Equity companies TPG Capital and KKR have called off the initial public offering of their online realty firm PropertyGuru. According to a source who spoke to Reuters, the decision was arrived at due to the uncertainty in the current IPO markets. The realtor issued a statement on Wednesday stating that they had arrived at a decision to halt going public and subsequently trading on the Australian Securities Exchange (ASX).

PropertyGuru had initially filed a prospectus in Australia in what would have raised the company $257 million in new capital. Backed by renowned PE firms, PropertyGuru was set to issue at a price range of $0.68 to $3.8 per share, this is according to records filed with the Australian Securities and Investment Commission.

On Tuesday this week, the firm issued shares at the lower end of a $0.68 to $3.08 indicated range, expecting to raise up to $260.28 million. However, on Wednesday, the firm’s fund managers were informed of the cancelation, making it the fourth during the day.

In their filed prospectus, PropertyGuru cited plans to expand its operations in the real estate sector. “We intend to use part of the proceeds from the offering to pursue our growth strategy,” PropertyGuru’s CEO Hari Krishnan said in a statement, adding that it was also considering providing customers in the core markets with access to mortgage financing using an online tool. Having reported a 26% growth in its annual revenues, the company seemed to have the right incentives for investors.

However, today’s decision alters the company’s investment landscape. Despite a strong indication of investor support mainly from the Australian market, the firm’s handlers seemed to have no second thoughts.

“Despite strong engagement throughout the process with prospective investors, the Board and existing shareholders have determined not to proceed with the offer,” said PropertyGuru chairman Olivier Lim.

“This decision took into account the current IPO market sentiment. Should the company seek new funds to support our identified growth opportunities, we have a committed existing shareholder base as well as access to private capital markets.”

The media report sought to assure the public that the firm still enjoyed the full support of the existing investors, including the two major ones (KKR and TPG Capital) that hold about a 58% stake in the company. “The company remains positive in its outlook for the performance of the business. Importantly, the company does not require new funds to be raised to fund its current business operations,” said PropertyGuru.