HONG KONG (BLOOMBERG) - A Vietnamese electric vehicle maker is testing the waters for what may be the largest initial public offering (IPO) by an Asian company in the United States since the Didi Global fiasco last year.
VinFast, a unit of conglomerate Vingroup, last week filed confidentially for the US IPO.
While VinFast said it had not decided on the amount, its parent has weighed raising about US$2 billion (S$2.7 billion) with the listing, Bloomberg reported last year.
At that size, the IPO would end a drought of large offerings by Asian issuers in the US market, though the deal would have to negotiate volatility in equities trading and caution from investors about a less well-known name.
The scarcity of major Asian listings in New York since Beijing widened a clampdown just after Didi's tumultuous US$4.4 billion debut in June may still work in its favour.
"The concern is not so much about whether VinFast can raise the capital or not, but more on whether VinFast's valuation meets market expectations given that the rising interest-rate scenario in the US is a headwind for companies getting listed," said Mr Ruchir Desai, a fund manager at Asia Frontier Capital in Hong Kong.
The company may delay the offering if conditions are not right, Reuters reported on April 9, citing Vingroup chairman Pham Nhat Vuong.
The Vietnamese company said late last month that it is planning to start building a factory in North Carolina this year, part of a planned complex that would have initial investment of US$2 billion, and a total amount of US$6 billion.
Still, many companies have stumbled trying to implement similar plans.
Fisker Automotive made hybrid cars before filing for bankruptcy after its battery supplier collapsed, Coda Holdings sold fewer than 100 vehicles and Faraday Future Intelligent Electric sold land in Nevada where it was going to build a factory.
The IPO may unlock value for the parent company, lifting Vingroup's market cap to as much as US$26 billion, according to Bloomberg Intelligence analysts Ken Foong and Fairuz Khalil.
That is assuming VinFast lists "at our high-end scenario of 12x enterprise value-to-sales", which is similar to Tesla, they wrote in a note.
