Vietnam's VinFast planned IPO in United States may be biggest from Asia since Didi

HANOI, April 12 (Bloomberg): A Vietnamese electric-vehicle maker is testing the waters for what may be the largest initial public offering by an Asian company in the United States since the Didi Global Inc. fiasco last year.

VinFast, a unit of conglomerate Vingroup JSC, last week filed confidentially for the US IPO.

While VinFast said it hadn’t decided on the amount, its parent has weighed raising about US$2 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 favor.

"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 Ruchir Desai, a fund manager at Asia Frontier Capital Ltd. in Hong Kong.

The company may delay the offering if conditions aren’t right, Reuters reported on April 9, citing Pham Nhat Vuong, chairman of Vingroup.

The Vietnamese company said late last month that it’s 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 Inc. made hybrid cars before filing for bankruptcy after its battery supplier collapsed, Coda Holdings Inc. sold fewer than 100 vehicles and Faraday Future Intelligent Electric Inc. 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’s assuming VinFast lists "at our high-end scenario of 12x enterprise value-to-sales,” which is similar to Tesla Inc, they wrote in a note. - Bloomberg