Small cap IPO market sees strong start to 2017
The initial public offering (IPO) market in Australia has seen a strong start to 2017, with a particularly impressive performance of the small cap sector, according to the study by HLB Mann Judd.
During the first six months of the year, the market saw a number of listings go up to 57 from 34 during the same period last year.
HLB Mann Judd’s study, IPO Watch, also found that 86 per cent of new companies had a market capitalisation of less than $100 million, with all listings during the first quarter of the year being small cap companies.
Also, a significant portion of companies that applied to list in the second half of the year were also small caps however that would result in a drop in the total amounts raised in 2017 compared to recent years.
In 2016 and 2015 the total amounts raised were $7.5 billion and $7.2 billion, respectively.
HLB Mann Judd Perth’s partner and author of the report, Marcus Ohm, said: “This time last year, we had seen two companies list with a market capitalisation of around $1 billion and 11 companies list with a market cap over $100 million”.
“So far in 2017, there has only been one listing with a market cap greater than $500 million, and seven with a market cap between $100 million and $500 million.”
Ohm also said that the current pipeline of listings for the remainder of 2017 did not show any particularly large listings on the horizon.
In terms of sectors, the study found that the pharmaceuticals, biotechnology, and life sciences sector saw some movement in the first half of 2017, with four listings raising a total of $37 million.
“A number of these listings were related to medical marijuana changes,” Ohm stressed.
The market also saw a decline in the number of reverse takeovers or backdoor listings due to the changes to the Australian Securities Exchange (ASX) listing rules which made the reverse takeover much less attractive.
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