SOLID ARTICLE !



  Phillip Capital written on 9 September 2020, the estimated value of the listing is worth a staggering  $1.8 billion. However, given the current climate, the IPO value should be at most $1 billion. With such tremendous catalyst, Sembcorp Industries share price could potentially hit $3.00. After all, Sembcorp Industries share price is traded at  $2.27  as of 16 September 2020 post-SCM demerger ($1.34 + (4.911 x $0.199)).


Will Sembcorp Industries share price soar with the listing of SEIL? Certainly, the listing of SEIL is not without basis. In 2018, Sembcorp Industries tried to list the business unit but had to postpone it because SCI bought over the remaining stakes of SEIL in December 2019. According to India regulations, the change in capital structure would require a re-file of IPO.


Given the recent slew of divestment activities aimed at unlocking value of Sembcorp Industries share price, the IPO of SEIL should be imminent. Against this backdrop, I envision Sembcorp Industries share price to be bullish in the coming months.


Sembcorp Industries share price has been buoyant following a series of asset recycling activities. In September 2020, the Group divested 32% stake in joint venture company Shenzhen Chiwan Sembawang Engineering Co (CSE) for $29.4 million. In July, the Group divested 100% of their interests in the water business in Chile for $53.6 million.


In July 2020, the Group sold a 30% equity interest it holds in Sino-Singapore (Chengdu) Innovation Park Development Co. (SSCIP) for $138.3 million. In 2019, the Group also divested the Xinmin Municipal Water in China and the commercial construction business of Sembcorp Design & Construction (SDC) in Singapore. Despite these efforts, Sembcorp Industries share price had been bearish, presumably due to losses incurred by its oil and gas businesses.

To revive Sembcorp Industries share price, I think the next move by the management should be the blockbuster IPO of its asset, SEIL. The fact that the Group increased its stake in SEIL to 100% means that the management is determined to make this IPO a success and henceforth, the motivation to have full control of SEIL. Although the timing of the IPO is uncertain, I think it should be looming soon as the series of asset divestment activities indicated that the Group is seeking to raise capital


The next wave for Sembcorp Industries share price should be the India IPO. I am inclined to think that the effect would be similar to that of Wilmar &rsquo s IPO of its Chinese unit, which caused the stock to be pretty bullish lately. With SEIL&rsquo s IPO, it will be Sembcorp Industries share price to steal the limelight. Till then, enjoy the ride.