Upson International Corp., the country's biggest retailer of computers and information technology equipment, beat expectations on its first trading day on Monday, surging 20.8 percent above its initial public offering (IPO) price to close at P2.90 per share.

The operator of mall-based shops such as Octagon Computer Superstore, Micro Valley and Gadget King raised P1.65 billion to help expand its network of roughly 200 outlets over the next four years.

The company's first day pump near the closing bell caught market observers by surprise after shares were trading as low as 5.4 percent below its P2.40 per share IPO price earlier in the session.

Upson shares hit an intraday high P3.30 each, data from the stock exchange showed.

A stunned stock broker noted prelisting demand for the stock was lower than expected and they had to return a number of shares that were not taken up by jittery retail investors.

The broker also explained that recent IPOs fell lower on their trading debut so buyers learned to wait for the listing day before stepping in.

"There will be more activity now in the coming days because people will be watching this stock," the broker said.

In a statement before the IPO, Upson president and CEO Arlene Sy said the IPO saw "healthy participation" from institutional investors.

She noted that significant majority of these large investors were "foreign funds ... a strong testament to their confidence in our company, the retail sector and the Philippines at large."

Additional 250 stores

Upson is targeting to more than double its network by opening another 250 stores, or an additional retail space of 25,000 square meters, by 2027. It had 200 outlets as of September last year.

"The expansion can and may also be financed by other fund sources such as internally-generated funds and/or borrowings," Upson said in its final IPO prospectus.

It also plans to build nine new warehouses and distribution facilities, which would be located in Manila, Cabanatuan, Dagupan, Naga, Iloilo, Bacolod, General Santos, Zamboanga and Palawan.

Upson had already secured locations in Cabanatuan, Naga, Dagupan and Manila, the prospectus showed.

For this year, Upson aims to open 50 stores within Metro Manila and key cities in Luzon, the Visayas and Mindanao.

"We understand the ever-growing need for electronic gadgets and accessories, and how it invites competition," Sy said, adding: "Nevertheless, we believe that to maintain our market leadership and for a stronger presence, this will be attained by further establishing stores nationwide. Having a robust nationwide network also helps sustain our customers' top-of-mind recall of our brands."

The company tapped First Metro Investment Corp. as the issue manager and bookrunner for the IPO. The latter was joined by RCBC Capital Corp. as joint lead underwriter. INQ