With Grab’s announcement to raise $1.5 billion through a convertible note, its net cash position is expected to rise to $7.7 billion, Maybank Investment Bank said Monday.

The research house said in a note that with limited capital needs for organic growth and the GoTo merger off the table, it sees two key reasons for Grab’s capital raise: bracing for new competition and preparing for potential exits by large shareholders.

“While competition remains rational and Grab is gaining share, rising threats from players like Vietnam’s GSM and Chinese giants such as Meituan or Didi could intensify pricing and driver incentives, demanding financial agility,” it said.

It also noted the exit of some ASEAN operators and openness to foreign tie-ups adds to the risk.

Grab may also be building a liquidity buffer to manage exits by large holders like Didi, Uber, or SoftBank, potentially using funds to stabilize the stock via buybacks, it added.

As of the first quarter of 2025, Grab’s cash liquidity and net cash position stood at $6.2 billion and $5.9 billion respectively.

In the first quarter, the firm’s adjusted trailing 12 month free cash flow (FCF) was $157 million while for full year Maybank expects it to generate FCF (pre-working capital
changes) of $427 million.

While a potential Grab-GoTo merger had been on investor radars, with Grab’s recent capital raise further fuelling such expectations, Maybank said that both companies have now confirmed they are no longer in discussions.

It noted that typically, in merger and acquisition (M&A) involving listed entities, the acquirer announces the deal prior to securing long-term financing to avoid inflating the target’s valuation.

Furthermore, it said Gojek’s partnership with Vietnam’s GSM to launch an electric vehicle (EV) taxi fleet suggests strategic divergence and diminishing prospects of a GrabGoTo merger.

“While Foodpanda remains a potential acquisition target, we believe the transaction size is unlikely to necessitate a capital raise,” said the research house.

According to Maybank, Grab’s capital needs for its fintech arm remain limited with loan book at $566 million.

It noted that Grab has prioritized ecosystem-driven lending with tight risk controls and, as such, has avoided aggressive loan expansion that could require heavy provisioning.

“The current loan book is relatively small and well-diversified across use cases and user segments, which keeps credit risk manageable,

“This approach reduces the likelihood of large losses and minimizes the need for significant capital buffers or equity injection,” said Maybank.

Grab announced last Wednesday the pricing of an upsized offering of $1.5 billion aggregate principal amount of zero coupon convertible senior notes due 2030.

The firm intends to use the net proceeds from the notes offering (i) for general corporate purposes, (ii) to optimize strategic flexibility, which may include potential acquisitions, while continuing to maintain a high bar for such transactions, (iii) for the Concurrent Repurchase, in relation to which it expects to fully utilize the $274 million authorized but unused amount under its $500 million share repurchase program announced in February 2024, and (iv) for any other share repurchases that may be authorized by its board of directors.

Maybank : Grab’s convertible issuance boosts net cash position to $7.7B