Major industrial park developer Becamex IDC faces uphill battle in capital raising

Becamex IDC Corp (HoSE: BCM), a leading developer of industrial parks and urban infrastructure in southern Vietnam, is facing significant challenges in its plan to raise capital and reduce state ownership - key moves to support its ambitious expansion strategy.

Bold capital raising plan fails to be launched

In late 2024, Becamex IDC made headlines by announcing a massive VND21 trillion ($794.85 million) capital raising plan through a public auction of 300 million shares, one of the largest equity offerings in Vietnam’s capital markets in recent years. The move sparked investor interest, reminiscent of the 2016-2018 wave of state divestments.

The company invited leading broker SSI Securities to be its advisor and met many foreign investment funds to promote the offering. The plan was approved by the State Securities Commission and a public auction date was set for April 28, 2025 at the Ho Chi Minh City Stock Exchange (HoSE).

Boosted by strong stock price momentum, rising from VND57,900 to VND78,300 ($2.96) between April 2024 and March 2025, conditions for the capital increase appeared favorable. However, a policy shock from President Donald Trump involving reciprocal duties derailed the outlooks of the industrial real estate field and Becamex. BCM’s stock price tumbled below VND60,000 ($2.27), lower than the VND69,000 offering price, prompting Becamex to postpone the public auction.

At its May 2025 AGM, CEO Nguyen Hoan Vu stated that the management decided to halt the offering to protect shareholders' interest and avoid dilution at low prices. However, the charter capital of just over VND10 trillion means Becamex faces major funding constraints. Therefore, the company still has to offer shares to increase capital, and the proposed solution is dividing the issuance.

Right after the meeting, Becamex proposed a smaller-scale capital increase, aiming to raise funds by auctioning 150 million shares at a minimum price of VND50,000 ($1.89).

Shareholder consent was sought via written ballot, with the result published on September 17: only 2.85% of voting shares supported the plan, while 95.44% abstained. The HCMC People’s Committee (formerly the Binh Duong People’s Committee), which holds a controlling stake, abstained, blocking the proposal.

This rejection dealt a blow to Becamex's fundraising efforts, especially at a time when Vietnam’s stock market remains buoyant and other corporates - VPBank, Techcombank, Hoa Phat, Gelex, Saigon Securities, and DIC Corp - are pushing forward with IPO plans for their subsidiaries or their own public offerings for capital hikes.

Becamex also has a dividend plan involving the issuance of 113.9 million shares, with a record date set for August. No updates have been provided to date.

Big ambition

Becamex IDC is a key player in Vietnam’s industrial real estate and urban development landscape, especially in the former Binh Duong province (now part of Ho Chi Minh City after an administrative merger).

It operates seven industrial parks with a combined area of 4,700 hectares and holds a 49% stake in the VSIP joint venture with Singapore’s Sembcorp, which has developed major projects in Binh Duong, Hai Phong, Bac Ninh, Hai Duong, Nghe An, and Quang Ngai.

As of Q2/2025, Becamex reported total assets of VND57.6 trillion ($2.18 billion), cash reserves of VND3 trillion, inventories of VND21.3 trillion, and investments in associates/joint ventures worth VND20.6 trillion.

Its equity stood at VND21,723 billion ($822.44 million), including VND10,350 billion in charter capital. The company had VND22,332 billion in debt and VND9,676 billion in short-term payables, mostly deferred cost of goods sold. Of note, bond debt accounted for over VND12,000 billion, with Becamex raising VND2,500 billion in August alone through bond issuances.

The company relied heavily on financial leverage, with a debt-to-equity ratio exceeding 1.0x and a debt-to-charter capital ratio over 2.0x. Despite constrained cash flow and high leverage, Becamex’s growth ambitions remain aggressive.

In 2025, it plans to expand the Bau Bang Industrial Park - phase 2 (380 hectares) and develop Cay Truong Industrial Park (700 hectares). From 2025 to 2030, Becamex targets 5-6 new large-scale industrial park and urban area projects, with total investment estimated in the hundreds of trillions of VND (VND100 trillion = $3.79 billion).

Its strategy includes developing integrated industrial-urban-service zones, such as My Phuoc, Thoi Hoa, and Bau Bang residential areas. It also plans high-impact commercial projects like WTC Expo Center, WTC Tower, and WTC Gateway (mixed-use culture and transit hub).

Together with Sembcorp, the company is shaping the next generation of VSIP industrial parks into innovation hubs, featuring start-up incubators, advanced manufacturing centers, and renewable energy R&D facilities.

To realize this vision, Becamex acknowledges it must raise capital and reduce state ownership. However, this process has proven difficult. Since its IPO and listing in late 2017, only 7.7% of state shares have been sold to the market. Analysts attributed this to unattractive offering prices, limiting investor access.

While minority shareholders pushed for lower pricing, the management explained that pricing decisions were aligned with government approvals and must be followed as mandated.

Despite its capital challenges, Becamex IDC delivered strong earnings in H1/2025, with revenue of VND4,756 billion ($180.07 million), a 2.4-fold increase year-on-year, and net profit of VND1,847 billion, up 4.5 times.

According to SSI Research, the growth was driven by accelerated land sales in the Binh Duong New City in the 2025-2026 period. Aided by fast infrastructure upgrades following the administrative merger of Binh Duong and Ho Chi Minh City, Becamex plans to transfer 20 hectares of residential land to secondary developers.

The Expanded Bau Bang IP is expected to come into operation and begin contributing revenue (estimated at VND1,550 billion) by year-end. In addition, VSIP and BWID joint ventures are projected to contribute VND2,100 billion ($79.51 million) in profits.

On the stock market, BCM closed Monday at VND67,700 ($2.56) per share.