Ant Group-backed GCash, the most successful Philippine payments platform, has been eyeing an initial public offering (IPO) for several years. It achieved profitability in 2021, three years ahead of target. Having hit that milestone four years ago and boasting 94 million users, the company seems like it should be primed to go public.
In fact, in June 2023, Ernest Cu, chairman of Mynt (the fintech firm that operates GCash), told Bloomberg that GCash was “pretty much ripe for it.” About a year later, he said, “We want to do it sooner rather than later. Sometime in 2025 would be the best estimate I can give you.”
As it turns out, that estimate was overly optimistic. In late October, Bloomberg reported that GCash had decided to postpone its market debut until the second half of 2026. It is easy to see why: As of November 12, the Philippine stock market (PSEi) is down 10-11% year-to-date. On November 11, it hit a five-year nadir of 5,629.07. Investor pessimism has prevailed this year given global economic jitters linked to mercurial United States trade policy and a domestic corruption probe related to large-scale infrastructure projects.
Some analysts believe the market may be near a bottom but emphasize that regaining confidence requires clear and credible government action, such as accelerating infrastructure spending and addressing governance issues. When that happens is anyone’s guess, but GCash’s management is betting that overall market conditions will have improved enough by the second half of next year to go ahead with its long-awaited IPO.
While some fintech startups face heavy pressure from venture capital investors impatient for an exit, GCash’s situation is different. Its key investors include the Philippine telecoms giant Globe (which owns 36% of Mynt, the fintech firm that operates GCash), Ant Group, and Japan’s UFJ Financial Group. These cash-rich corporates can afford to wait for better market conditions before cashing out.
At the same time, GCash is in a strong financial position. During Business World’s One-on-One online interview series on September 29, Globe Telecom Inc. President Carl Raymond Cruz said that GCash does not need capital. It [GCash]generates its own capital so the need for an IPO technically, while it’s there, [is] not really high on the agenda right now,” he said.
Another factor contributing to GCash’s cautious IPO approach is the pressure on earnings caused by recent regulatory curbs on online gambling transactions. Such transactions previously helped the company rapidly grow its user base. Globe’s latest financial statements show that net contributions from affiliates, mainly Mynt, fell 24% sequentially in the third quarter to P1.6 billion from P2.1 billion in the June quarter.
During Globe’s third-quarter earnings call, chief financial officer Carlo Pruno said, “We do believe may see some pressure in the short term.” However, he added that Globe is confident in GCash’s medium and long-term growth given its strong fundamentals.
Meanwhile, GCash is continuing to prepare for its market debut. On Oct. 29, the Philippines’ BusinessWorld reported that Mynt had secured approval from the Securities and Exchange Commission (SEC) for its stock split, an importantstep toward its eventual IPO. The SEC’s approval allows Mynt to increase its common shares to P71.66 billion, at three centavos each, while keeping its authorized capital stock at P2.15 billion. A stock split boosts the number of shares without altering the company’s overall capitalization, effectively making each share more affordable and improving liquidity.
Investor anticipation about the GCash IPO remains high, despite the delay. Analysts say the deal could raise $1.5 billion and be the Philippines’ biggest of all time, surpassing the $1 billion IPO of Philippine food company Monde Nissin in 2021.
In this case, good things may indeed come to those who wait.