Financial Adviser: 5 Things Every Investor Needs to Know About The GCash IPO

GCash, through its parent company Mynt Inc., has finally gone public after pricing its initial public offering (IPO) at P6.60 per share.

The company is expected to raise about P53 billion from the IPO, making it one of the largest public offerings in the history of the Philippine stock market. If the overallotment option is fully exercised, the total size of the offering could reach approximately P60.9 billion.

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It will offer about 8.03 billion shares, composed of approximately 1.61 billion new primary shares and 6.42 billion secondary shares to be sold by existing shareholders. An additional 1.20 billion secondary shares may be sold under the overallotment option.

The base offering will represent about 12 percent of GCash's outstanding shares after the IPO. If the overallotment option is fully exercised, the shares sold to the public will represent about 13.8 percent of the company's post-IPO shares.

GCash shares will be listed on the Philippine Stock Exchange under the ticker symbol GCASH, with a target listing date of Oct. 20, 2026.

At the IPO price of P6.60 per share, GCash will have an estimated market capitalization of approximately P441.5 billion, based on about 66.90 billion outstanding shares after the offering.

This market capitalization will make the company immediately rank among the largest listed companies in the Philippine Stock Exchange. To put its size in perspective, International Container Terminal Services (PSE: ICT) is currently the largest Philippine-listed company by market capitalization at about P1.8 trillion, followed by SM Investments Corporation (PSE: SM) and BDO Unibank (PSE: BDO) at about P605 billion and P603 billion, respectively. Bank of the Philippine Islands (PSE: BPI) has a market capitalization of about P493 billion, while SM Prime Holdings (PSE: SMPH) is valued at P451 billion.

With an estimated market capitalization of P441.5 billion at its IPO price, GCash would therefore enter the market at a size already comparable with some of the country's largest blue-chip companies.

As in any IPO, it is always wise to spend some time understanding the business of the company and evaluate its financial performance and growth prospects.

The more investors understand the fundamentals and valuation of the stock, the better they can assess the potential risks and returns of investing at the IPO price.

Here are the five things every investor needs to know about the GCash IPO:

At the aforementioned final offer price of P6.60 per share, GCash will raise about P53 billion from the sale of approximately 8.03 billion shares. But investors should understand that most of the money raised from the IPO will not actually go to GCash.

At P6.60 per share, the sale of primary shares will generate about P10.6 billion in gross proceeds for GCash. In comparison, the sale of secondary shares will generate approximately P42.4 billion for the selling shareholders.

This means that only about 20 percent of the P53-billion base offering will provide fresh capital to GCash, while the remaining 80 percent will go to existing shareholders who are selling part of their investments.

Put another way, for every P1 invested in the IPO, only about 20 centavos will represent new money going into GCash. About 80 centavos will be used to purchase shares from existing shareholders.

When GCash issues primary shares, the proceeds become additional resources that the company can use to expand its business, develop new products, or finance other investments. If these investments generate attractive returns, the additional capital can contribute to future earnings growth.

When existing shareholders sell secondary shares, however, GCash does not receive any additional capital. The money simply changes hands between the new investor and the existing shareholder.

In effect, the IPO provides an opportunity for shareholders who invested in GCash before its public listing to cash out of their investments by selling some of their shares to new public investors.

The amount going to existing shareholders could rise further if the overallotment option is fully exercised. Up to another 1.20 billion shares, worth about P7.95 billion at P6.60 per share, may be sold under the option. These are also secondary shares. GCash will not receive any of the proceeds from their sale.

If the overallotment option is fully exercised, the total size of the IPO could therefore increase to P60.9 billion, but the gross amount raised directly by GCash would be only P10.6 billion.

This means that as much as P50.3 billion of the total P60.9-billion offering could ultimately go to the selling shareholders, while only P10.6 billion would represent new capital for GCash.

The company does have plans for the money it will receive. GCash intends to use its net primary proceeds for digital financial services growth, product development, and general corporate purposes.

Under the allocation disclosed by the company, about 60 percent of the expected net proceeds was earmarked for digital financial services growth, while product development and general corporate purposes were each allocated 20 percent.

Digital Financial Services includes GCash's CreditTech and WealthTech businesses. CreditTech covers its lending operations, while WealthTech includes other financial services offered through the GCash ecosystem. If the primary proceeds are lower than expected, Digital Financial Services growth will receive first priority.

The relatively small amount of fresh capital being raised is also worth comparing with the size of GCash itself.

At P6.60 per share, GCash will have an estimated post-IPO market capitalization of about P441.5 billion. The P10.6 billion of gross new capital being raised by the company represents only about 2.4 percent of its post-IPO market value.

GCash is also already a profitable company. It generated P17.25 billion in net income in 2025, which means that its profit last year alone was considerably larger than the amount of fresh capital it expects to raise from the IPO.

For investors buying at P6.60, therefore, it is important to recognize what they are paying for. Most of their investment will not finance new assets or businesses inside GCash. Instead, it will allow existing shareholders to convert part of their ownership into cash while transferring those shares to new public investors.

GCash built its name as an electronic wallet, but that is no longer the whole business investors are buying in the IPO. GCash is also becoming a consumer lending business. 

It began in 2004 as a mobile money service focused on transfers and payments. Over time, it became the electronic wallet millions of Filipinos use to send money, pay bills and merchants, buy loads, and make other everyday transactions, but payments alone no longer explain GCash's growth. 

GCash’s rapid earnings growth over the past several years has come from two businesses with different economics: a payments platform and a lending business. 

FUSE, GCash's financing subsidiary, was established in 2016. GCredit became its initial major credit product, while GLoan and GGives were launched in 2021. These products expanded GCash beyond payments into cash loans and installment financing. 

In 2023, GCash generated P33.60 billion in adjusted revenues. Payment Solutions accounted for P23.08 billion, or 68.7 percent, while CreditTech contributed P10.22 billion, or 30.4 percent. WealthTech accounted for the remaining 0.9 percent. 

By 2024, adjusted revenues had increased 61.1 percent to P54.13 billion. Payment Solutions remained the largest business at P36.74 billion, but CreditTech had already grown to P16.67 billion. 

The expansion continued in 2025. Total adjusted revenues increased another 47.2 percent to P79.67 billion. Payment Solutions generated P50.34 billion, up 37.0 percent, while CreditTech revenues surged 71.1 percent to P28.52 billion. 

The numbers show just how important lending became to GCash's growth. Between 2023 and 2025, total adjusted revenues increased by about P46.07 billion. CreditTech alone contributed about P18.30 billion of that increase, or roughly 40 percent of GCash's total incremental adjusted revenues during the period. 

As a result, the composition of the business steadily changed. Payment Solutions' share of adjusted revenues declined from 68.7 percent in 2023 to 63.2 percent in 2025, while CreditTech's share increased from 30.4 percent to 35.8 percent.  

This expansion coincided with rapid earnings growth. Net income rose from P6.38 billion in 2023 to P11.13 billion in 2024 and P17.25 billion in 2025, equivalent to a two-year compound annual growth rate of about 64 percent. 

Net income margin improved from 19.0 percent to 21.6 percent over the same period, while return on equity increased from 25.8 percent in 2023 to 32.8 percent in 2024 before staying at 32.1 percent in 2025. 

EBITDA showed a similar trend. It increased from P6.35 billion in 2023 to P13.46 billion in 2024 and P20.43 billion in 2025, while the EBITDA margin expanded from 18.9 percent to 25.6 percent. 

On these numbers alone, GCash has been an impressive growth story, but the first six months of 2026 show that the story is changing again. 

Total adjusted revenues increased only 9.8 percent to P43.03 billion from P39.19 billion a year earlier. Net income increased only 7.3 percent to P10.82 billion from P10.09 billion.

More importantly, nearly all of the recent growth came from financial services rather than the traditional payments business. 

Payment Solutions adjusted revenues actually declined 4.6 percent to P24.66 billion in the first half of 2026 from P25.85 billion a year earlier. Its contribution to total adjusted revenues fell sharply from 66.0 percent to 57.3 percent. 

CreditTech moved in exactly the opposite direction. CreditTech revenues jumped 38.8 percent to P17.98 billion from P12.95 billion. Its share of adjusted revenues increased from 33.0 percent to 41.8 percent in just one year. 

This means that for every P100 of adjusted revenues generated by GCash during the first half of 2026, almost P42 already came from lending, compared with about P30 in 2023. 

Without that growth from CreditTech, GCash's overall revenue growth would have looked very different. Payment Solutions lost about P1.19 billion of adjusted revenues year on year, while CreditTech added about P5.03 billion. WealthTech contributed only a small additional amount. 

The slowdown in GCash's growth also comes at a time when the Philippine economy has lost momentum. GDP growth slowed from 5.7 percent in 2024 to 4.4 percent in 2025. The economy grew only 2.8 percent in the first quarter of 2026 and 2.3 percent in the second quarter. 

GCash has followed a similar direction. Its adjusted revenue growth slowed from 61.1 percent in 2024 to 47.2 percent in 2025 and only 9.8 percent in the first half of 2026. 

Slower economic growth does not necessarily explain GCash's slowdown. But a weaker economy could make it more difficult for the company to return to the exceptional growth rates of the past, particularly as consumer lending becomes a larger part of its business. 

This does not mean that GCash has become a weak business. It remains highly profitable, but the numbers suggest that the extraordinary growth rates of the past may be becoming more difficult to sustain. This makes the growing importance of CreditTech even more significant.  

In other words, CreditTech did more than supplement GCash's growth in the first half of 2026. It was the principal reason total adjusted revenues still increased, but lending does not have the same economics as processing payments. 

To generate CreditTech revenue, GCash has to fund loans and absorb the risk that some borrowers will not repay them. As CreditTech expanded, direct costs increased 20.5 percent to P12.00 billion in the first half of 2026 from P9.96 billion a year earlier.  

Provision for credit losses alone increased 29.6 percent to P7.93 billion from P6.12 billion. Management attributed the increase to the expansion of GCash's on-book loan portfolio. 

The higher cost of CreditTech helps explain why revenue growth did not translate into higher operating profit.  

While adjusted revenues increased 9.8 percent and net income rose 7.3 percent, EBITDA fell 4.3 percent to P11.76 billion from P12.28 billion. EBITDA margin declined from 31.3 percent to 27.3 percent. Operating profit also declined 6.3 percent to P11.27 billion from P12.03 billion. 

Return on equity has begun to moderate as well. After reaching 32.8 percent in 2024 and 32.1 percent in 2025, trailing 12-month ROE declined to 26.8 percent as of June 2026. 

GCash remains a fundamentally strong company. It has built a huge payments ecosystem, almost tripled net income between 2023 and 2025, and generated returns on equity above 30 percent in its two most recent full years. 

But the source and pace of its growth are changing. Payment Solutions is no longer driving growth the way it did before. CreditTech has taken a much larger role, but lending also brings funding costs and credit risk that the payments business does not face to the same degree.

A great company can still become an expensive investment if investors pay too much for the growth they expect it to deliver. 

GCash's strong profitability, dominant position in digital payments, and rapid historical growth can justify a premium valuation. But the P6.60 IPO price does more than recognize what GCash has already achieved. It also places a considerable value on what the company is expected to achieve in the future. 

One way to assess how much investors are paying for those expectations is to separate what can already be supported by GCash's financial statements from the value that depends on future growth. 

Let’s start with book value. As of June 2026, GCash had P74.12 billion in equity, equivalent to a book value of about P1.14 per share before the IPO. After the fresh capital from the primary shares is added, we estimate post-IPO book value at roughly P1.25 per share, subject to final IPO expenses. 

Book value alone, however, understates the value of GCash because the company earns a high return on that equity. 

As of June 2026, GCash has generated a trailing return on equity of 26.8 percent. For our valuation, we use a required return of about 14.4 percent, based on a Philippine 10-year government bond yield of roughly 7.7 percent plus a 6.7 percent equity risk premium for investing in Philippine stocks.  

If we deduct the required return of 14.4 percent from GCash's trailing ROE of 26.8 percent, we get an excess return of 12.4 percentage points. In other words, GCash is currently earning 12.4 percentage points above the return investors require. It is this excess return that creates value above book value. 

For every P1.25 of equity, for example, a 26.8 percent ROE would generate roughly P0.34 of earnings. But investors require about P0.18, based on our assumed 14.4 percent required return. 

The difference of roughly P0.16 represents GCash's residual earnings, or the earnings it generates after covering the return required by investors. 

We can therefore value the company from two components: 

Value = Book Value + Present Value of Residual Earnings 

To establish an accounting anchor, we initially assume no growth in residual earnings. This does not mean that we expect GCash to stop growing. It simply allows us to determine how much value can be supported before we start paying for future growth. 

 
If the roughly P0.16 in residual earnings continues without growth, its present value at a 14.4 percent required return is about P1.08 per share. Adding that to GCash's estimated P1.25 post-IPO book value gives an anchoring value of about P2.33 per share. 

The P2.33 represents the portion of value that can be supported without assuming growth in residual earnings. Of course, GCash can clearly be worth more if it continues to grow while earning returns above its required return.  

The difference between P6.60 and the P2.33 accounting anchor is about P4.27 per share. Put another way, roughly 35 percent of the IPO price can be anchored on GCash's current book value, and the remaining 65 percent depends on future growth.

The P4.27 is the speculative component of the valuation. 

Speculative does not mean that the value is imaginary or that GCash cannot deliver it. It simply means investors cannot establish that value from what the company is earning today. It depends on future earnings that have yet to be generated. 

The next step is to determine the implied growth rate in the P6.60 IPO price. Rather than forecast how fast GCash will grow, we work backward from the IPO price to determine how much growth is already built into the valuation.  

Based on our assumptions, P6.60 implies that residual earnings would need to grow by about 11.5 percent annually over the long term, assuming GCash can maintain an ROE close to its current 26.8 percent and investors continue to require a return of about 14.4 percent. 

The 11.5 percent therefore represents the long-term growth assumption embedded in the P6.60 IPO price, rather than our own estimate of GCash's future growth.  

Sustaining such a rate over the long term would be demanding, especially for a company that already operates at considerable scale.

It would also require GCash to grow substantially faster than the Philippine economy, which has historically expanded by around 6 percent annually during normal growth periods, for an extended period.  

Growth creates value only when the additional capital invested in the business continues to earn more than investors' required return. GCash therefore needs not only to grow but also to preserve a large spread between its ROE and its cost of equity. 

GCash's ROE has already declined from 32.8 percent in 2024 and 32.1 percent in 2025 to 26.8 percent on a trailing 12-month basis as of June 2026. Adjusted revenue growth, meanwhile, slowed to 9.8 percent in the first half of 2026. 

None of these figures proves that GCash cannot deliver the growth implied by P6.60. Its large ecosystem and historical profitability could allow it to produce strong residual earnings for many years, but investors should recognize what they are buying. 

At P6.60, they are not paying only for the GCash that exists today. About P4.27 of every share, based on our assumptions, represents value that GCash still has to create. This makes the IPO price heavily dependent on expectations about the future.

The 11.5 percent therefore represents the long-term growth assumption embedded in the P6.60 IPO price, rather than our own estimate of GCash's future growth. Sustaining such a rate over the long term would be demanding, especially for a company that already operates at considerable scale.

The growth assumption would have been even more demanding at the original maximum offer price of P10 per share indicated in the preliminary prospectus. Using the same assumptions, a P10 valuation would require implied long-term residual earnings growth of about 12.6 percent annually. 

We can see this by approaching the valuation from the opposite direction. Instead of asking what growth is implied by the IPO price, we can assume a more conservative 6 percent long-term growth rate, which is the average GDP growth, and determine what GCash would be worth under the same framework. 

Keeping GCash's ROE at 26.8 percent and the required return at 14.4 percent, a 6 percent long-term growth assumption produces an estimated value of only P3.10 per share. This is less than half of the P6.60 IPO price.  

The exercise shows how much of GCash's valuation depends on growth that has yet to occur. The company does not merely have to remain profitable. It has to sustain strong growth while continuing to earn returns well above its required return for a long period.

Growth alone does not create value for investors. A company creates value when the return it earns on the money invested in the business exceeds the cost of raising that capital. 

One way to measure this is to compare return on invested capital, or ROIC, with the weighted average cost of capital, or WACC. ROIC measures how efficiently a company earns profits from the capital invested in the business, while WACC represents the return required by its debt and equity investors. 

We can use these two measures to estimate how much investors should be willing to pay for every peso of capital invested in the company. This is expressed through the enterprise value-to-invested capital ratio, or EV/IC. 

In a simple no-growth framework, the relationship can be expressed as:  

EV/IC = ROIC ÷ WACC 

A company that earns a higher return on capital relative to its cost of capital should command a higher EV/IC multiple. If the market EV/IC is higher than the multiple supported by the company's ROIC and WACC, the stock may be overvalued. If it is lower, the stock may be undervalued. 

Because GCash is still expected to grow, however, a no-growth valuation would be too restrictive. We therefore adjust the model to incorporate both future growth and the reinvestment needed to support that growth: 

EV/IC = (ROIC − Growth) ÷ (WACC − Growth) 

Following this framework, we estimate GCash's WACC at about 14 percent. 

At the P6.60 IPO price, equity represents about 95 percent of GCash's capital structure, while debt accounts for about 5 percent. We estimate the required return on equity at 14.4 percent and the after-tax cost of debt at 6.1 percent. Combining the two based on their respective weights gives GCash a WACC of approximately 14 percent. 

We then compare this with GCash's ROIC. Based on its latest financials, we estimate that GCash generated about P14.2 billion in after-tax operating profit from about P57.1 billion of invested capital. This gives the company an ROIC of about 25 percent. 

This is a strong return. GCash is earning about 25 percent on its invested capital against a 14 percent cost of capital, a difference of about 11 percentage points. In other words, the underlying business is creating substantial value from the capital invested in it. 

Rather than forecast GCash's earnings year by year, we assume a long-term growth rate of 8 percent. This uses a 6 percent medium-term economic growth benchmark for the Philippines plus a two-percentage-point premium to reflect GCash's exposure to the faster-growing digital financial services market. 

We also assume GCash can maintain a 25 percent ROIC over the long term, close to what it generates today. This is a generous assumption because it means that even as GCash becomes considerably larger, it continues to earn returns well above its estimated 14 percent cost of capital. 

Using GCash's estimated ROIC of 25 percent, WACC of 14 percent, and long-term growth of 8 percent: 

(25 percent − 8 percent) ÷ (14 percent − 8 percent) = 2.8 times 

We then compare this with GCash's actual EV/IC at the P6.60 IPO price. At that price, GCash has an implied enterprise value of about P415 billion. Dividing this by P57.1 billion of invested capital gives: 

EV / IC = P415B ÷ P57.1B = 7.3 times 

GCash's market EV/IC of 7.3 times is therefore considerably higher than the 2.8 times supported by its ROIC, WACC, and our 8 percent long-term growth assumption. Based on this framework, the stock may be overvalued at its P6.60 IPO price. 

At P6.60, GCash may already be overvalued based on the two valuation approaches discussed earlier. The residual-income model shows that the IPO price already requires substantial long-term growth, while the ROIC approach shows that investors are paying an EV/IC multiple considerably higher than what our assumptions support. 

The valuation becomes even more demanding if GCash rallies after its listing without a corresponding improvement in its fundamentals. 

At P6.60, GCash has an estimated enterprise value of about P415 billion, equivalent to an EV/IC multiple of approximately 7.3 times. This is already considerably higher than the 2.8 times supported by our assumptions of a 25 percent ROIC, 14 percent WACC, and 8 percent long-term growth. 

Suppose the share price rises to P7.60 after listing. Investors who bought at the IPO would have earned about 15 percent, but GCash's enterprise value would rise to roughly P482 billion. Its EV/IC would increase to about 8.4 times, even further above the 2.8 times supported by our assumptions. 

The valuation becomes more stretched if the stock reaches P10, the maximum offer price originally offered. An investor who bought at P6.60 would have a gain of about 52 percent, but GCash's enterprise value would increase to roughly P642 billion. Its EV/IC would rise to about 11.2 times. 

This does not mean GCash cannot trade at P7.60 or P10. Market prices can remain above estimates of fundamental value, particularly when investors expect exceptional future growth.  

But unless GCash's ROIC or growth prospects improve substantially, the higher share price would simply widen the gap between what investors are paying and what the company's current fundamentals support.  

The risk is that investors may pay today for future growth that may not materialize. If GCash fails to meet those expectations, the stock could face a significant valuation correction. 

But unless GCash's ROIC or growth prospects improve substantially, the higher share price would simply widen the gap between what investors are paying and what the company's current fundamentals support.  

The risk is that investors may pay today for future growth that may not materialize. If GCash fails to meet those expectations, the stock could face a significant valuation correction of roughly 7.7 percent plus an equity risk premium of about 6.7 percent. 

But required returns do not remain constant. When government bond yields rise, investors can earn higher returns from lower-risk securities and therefore tend to demand more from equities. Greater economic and market uncertainty can also increase the equity risk premium.  

This possibility is particularly relevant in the current environment. Philippine inflation reached 6.1 percent in August, while the BSP has raised its policy rate to 5 percent. The IMF has also lowered its 2026 Philippine growth projection to 3.4 percent and said risks to the outlook remain tilted to the downside. 

Suppose, for example, that the 10-year government bond yield rises from about 7.7 percent to 9 percent while the equity risk premium remains unchanged. GCash's required return would increase from about 14.4 percent to approximately 15.7 percent. 

This seemingly small change can have a significant effect on valuation. Assuming GCash still generates a 26.8 percent ROE and achieves 8 percent long-term residual earnings growth, our estimated value would fall from about P3.67 per share at a 14.4 percent required return to approximately P3.06 at a 15.7 percent required return. 

The same effect occurs if investors become more risk-averse. If greater uncertainty adds one percentage point to the required return, the required return increases to 15.4 percent and the estimated value falls to about P3.18. If greater uncertainty adds two percentage points, the required return increases to 16.4 percent and the estimated value falls further to around P2.80. 

GCash creates value because its ROE exceeds the return investors require. If the required return rises while GCash's ROE remains unchanged, the excess return becomes smaller. At the same time, those future residual earnings are discounted at a higher rate. Both effects reduce the value investors should be willing to pay today. 

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