Buying an initial public offering can feel different from buying an ordinary stock.
There is usually considerable publicity before listing. Institutional investors may have already committed money. Public investors compete for allocations. If demand exceeds the shares available, investors who failed to receive their desired allocation may buy once trading begins, but what happens after the excitement fades?
We analyzed 25 Philippine IPOs listed from 2021 to 2025 and compared their year-end closing prices with their original IPO prices. We then followed the companies into their second and third calendar years when sufficient price history was available.
The results reveal an interesting pattern. During the listing year, investing in an IPO was almost a 50-50 proposition. The odds deteriorated considerably afterward.
This history does not predict what any individual IPO will do. But it provides a useful way to understand the distribution of past outcomes and apply those numbers to upcoming listings such as GCash parent Mynt Inc., which has priced its IPO at P6.60 per share.
The first year was almost a coin toss
Of the 25 IPOs in our study, 13 finished their listing year above their IPO prices and 12 finished below.
| Period |
IPOs observed |
Above IPO price |
Below IPO price |
| Listing year |
25 |
52.0% |
48.0% |
| Year 2 |
23 |
30.4% |
69.6% |
| Year 3 |
20 |
30.0% |
70.0% |
The listing year therefore offered no overwhelming historical advantage to either side. But the magnitude of the returns tells another story.
Among the 13 winners, the average gain was 49.2 percent. Among the 12 losers, the average decline was 22.3 percent.
That 49.2-percent average gain needs context. Top Line Business Development Corp. (TOP) rose more than 400 percent from its IPO price and substantially lifted the average for the winning group.
The median return for all 25 IPOs was only 1.7 percent. Excluding TOP, the overall average listing-year return falls to about negative 1.9 percent.
Once TOP is removed from the winning group, the average gain among the remaining winners falls to approximately 18.6 percent. . The median return of 1.7 percent suggests that the typical listing-year outcome was much closer to break-even.
The odds changed dramatically in Year 2
Once IPOs entered their second calendar year, the distribution became much less favorable.
Only seven of the 23 companies with sufficient data remained above their IPO prices. This means the historical frequency of being above IPO price fell from 52 percent to just 30.4 percent. Conversely, the proportion below IPO price increased from 48 percent to 69.6 percent.
The average winner was still 44.9 percent above its IPO price, although this figure was again affected by an exceptional performer. The average loser was 32.3 percent below IPO price.
OceanaGold Philippines (OGP) illustrates the upside. It went public at P13.33 in 2024 and finished that year at P14.02. By the end of 2025, it had climbed to P32.20, or about 142 percent above its IPO price.
Monde Nissin (MONDE) went in the opposite direction. It initially rose about 20 percent from its P13.50 IPO price by the end of its listing year. By Year 2, however, its price had fallen to P11.08, about 18 percent below its IPO price.
First-year success therefore did not necessarily persist. Of the 11 companies with Year 2 data that had initially finished their listing years above IPO price, five subsequently fell below it.
By Year 3, losses became much larger
The winner-loser ratio barely changed in Year 3.
Of the 20 IPOs with sufficient history, only six, or 30 percent, remained above their original offer prices. Fourteen, or 70 percent, were below.
What changed more significantly was the magnitude of the losses. The six winners had an average gain of about 24.8 percent from their IPO prices. The 14 losers had an average decline of approximately 47.5 percent. The median return for the entire group was negative 34.7 percent.
Taken together, the results suggest that the challenge was not simply whether an IPO rose immediately after listing. It was whether that valuation could be sustained.
The proportion of IPOs below their offer prices rose from 48 percent during the listing year to about 70 percent by Year 2 and remained around that level in Year 3. At the same time, the average shortfall among the losing stocks became considerably larger.
These returns are measured against the original IPO price, not against the previous year’s closing price. They therefore show how an IPO investor would have fared relative to the offer price rather than the stock’s year-to-year performance.
Large IPOs performed better initially
Deal size produced another interesting difference.
All three IPOs that raised more than P20 billion finished their listing years above their offer prices. These were MONDE, RL Commercial REIT (RCR) and Maynilad Water Services (MYNLD). Their median listing-year return was approximately 18 percent.
Expanding the group to offerings above P10 billion adds MREIT, Filinvest REIT (FILRT) and DDMP REIT (DDMPR). Five of these six IPOs finished their listing years above their offer prices. That represents about 83 percent of the group compared with 52 percent for the entire sample.
Smaller offerings showed the opposite pattern. Only three of the 10 IPOs that raised P1.5 billion or less finished their listing years higher.
But the apparent size advantage did not persist. Among the five P10-billion-plus IPOs old enough to have second-year observations, none was still above IPO price at the end of Year 2. The same five were also below IPO price in Year 3. These were MONDE, RCR, MREIT, FILRT and DDMPR.
There is an important qualification. Four of these companies are REITs, where dividends represent an important component of investor returns. A price-only comparison therefore understates their actual investment performance.
Still, the results suggest that deal size was associated with stronger initial price performance in this sample, but not necessarily with sustained performance.
What would these historical results mean for GCash?
GCash presents an unusual test because its roughly P53-billion base offering is larger than any IPO in our 2021 to 2025 sample.
Institutional demand has also been strong. But suppose we set aside GCash’s fundamentals for a moment and apply nothing more than the historical IPO statistics to its P6.60 offer price.
The exercise produces a range rather than a forecast. During the listing year, 52 percent of the IPOs in our sample finished above their offer prices and 48 percent finished below.
Among the winners, the average gain falls to approximately 18.6 percent once TOP’s extraordinary return is excluded.
If GCash experienced the same gain:
P6.60 × 1.186 = P7.83
Among the losing IPOs, the average decline was 22.3 percent.
Applied to GCash:
P6.60 × 0.777 = P5.13
This produces two historical scenarios: P7.83 if GCash behaves like the average winner, and P5.13 if it behaves like the average loser, but we can go one step further.
What if we account for both outcomes?
Instead of treating the winner and loser scenarios separately, we can weight each by how frequently it occurred.
The 52-percent historical frequency of an 18.6-percent average gain contributes about 9.7 percentage points to expected return. The 48-percent frequency of an average 22.3-percent decline subtracts about 10.7 percentage points.
The resulting probability-weighted return is approximately negative 1 percent.
Applied to GCash:
P6.60 × 0.990 = approximately P6.53
The result may seem surprising. IPO investors had a slightly greater historical chance of finishing the listing year ahead than behind. But after TOP is removed, the average loss among losing IPOs was greater than the average gain among the remaining winners.
That is enough to pull the probability-weighted result slightly below the offer price. P6.53 is simply the expected value produced when the historical frequency and magnitude of winning and losing listing-year outcomes are applied to GCash.
GCash belongs to a different IPO class
There is another way to look at GCash.
Its roughly P53-billion base offering places it well above the P20-billion threshold used for the largest IPOs in our sample.
MONDE, RCR and MYNLD all finished their listing years above their IPO prices. Their median return was approximately 18 percent.
Apply that return to GCash:
P6.60 × 1.18 = P7.79
Interestingly, this is almost identical to the P7.83 produced by the average winner calculation after TOP is excluded.
Two different approaches therefore produce an upside scenario of roughly P7.80 during the listing year.
The first comes from the average performance of winning IPOs after an extreme outlier is removed. The second comes from the median performance of the largest IPOs.
But the large-IPO result comes with an obvious limitation. There are only three P20-billion-plus offerings in the sample. Their experience is too limited to establish a reliable probability.
What happens after the IPO year?
This is where the historical evidence becomes less favorable.
By Year 2, only 30.4 percent of IPOs remained above their original offer prices. By Year 3, the proportion was almost unchanged at 30 percent.
The size of the losses also increased. IPOs that were below their offer prices had an average shortfall of 22.3 percent during the listing year, 32.3 percent by Year 2 and 47.5 percent by Year 3.
These figures should not be interpreted as sequential annual losses. The Year 2 and Year 3 numbers are measured against the original IPO price, not against the previous year’s closing price.
The historical message is simpler: the longer the observation period, the smaller the proportion of IPOs that remained above their original offer prices.
Why can the advantage fade?
The data cannot establish what caused the deterioration.
Initial institutional demand can fade after the offering. IPO publicity disappears. Lock-up restrictions eventually expire. More importantly, investors begin to receive actual quarterly and annual results that allow them to compare the company’s performance with the expectations embedded in its IPO valuation.
Broader market conditions also changed considerably across the companies and years in our sample. The subsequent declines therefore cannot automatically be attributed to the IPO process itself.
Instead, the results highlight the difference between selling an IPO successfully and sustaining its valuation after listing.
GCash will eventually have to justify P6.60
GCash enters the market with characteristics that distinguish it from most IPOs in our sample. Its offering is exceptionally large, and institutional demand has been strong.
The historical analysis produces two useful reference points.
Across the broader IPO sample, weighting the average winner and loser outcomes by their historical frequencies gives about P6.53. Among IPOs above P20 billion, the median listing-year return would put GCash at about P7.79.
GCash will eventually face the same test.
Institutional demand can help establish the IPO price and support the shares during the initial trading period. But as more financial results become available, investors will judge whether the assumptions embedded in P6.60 were justified. For GCash, the business will eventually have to justify it.
