Mexico eyes record Year for IPOs

By Elliot Bullman

As many as 10 companies could list on Mexico’s stock exchange by the end of 2017, sources from the Mexican stock exchange said, potentially marking it a record year ahead of slower expected activity in 2018 due to Mexico’s elections.

So far in 2017, four companies have listed in Mexico, raising a combined $2.1 billion in initial public offerings (IPOs).

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In addition, Sigma Alimentos, a unit of industrial conglomerate Grupo Alfa and Traxion, a transportation company controlled by private equity funds Nexxus and Discovery Americas, this week confirmed their IPOs.

Sigma aims to raise about 18.5 billion pesos ($1.03 billion) while Traxion expects around 4.32 billion pesos.

In October, Banco Mifel is expected to launch its IPO, as is the transportation subsidiary of Mexican miner Grupo Mexico.

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The pace of IPOs in Mexico typically slows during an election year, and some investors are especially wary of the current front-runner for next July’s presidential contest, leftist hopeful Andres Manuel Lopez Obrador.

If all the planned IPOs take place, Mexico could also break its 2012 record amount raised, which according to consultancy firm Dealogic stood at $6.8 billion, mostly driven by the $4 billion listing in 2012 of Spanish bank Santander.

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Juan Manuel Olivo, head of promotion and issuers for the Mexican stock exchange, said the IPO spike this year is primarily due to stable economic conditions as well as new business opportunities that require capital and attractive valuations.

He said the Mexican stock exchange has also stepped up efforts to better inform companies of their financing options, which also include issuing debt and new real estate investment trusts known locally as Fibras.

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