H1 sees $2.9b raised in IPOs

Strong investor sentiment and positive macroeconomic conditions saw the volume of initial public offerings (IPOs) rise to 61 in the first half of 2021.

According to the latest ‘IPO Watch Australia Mid-Year Report’ from HLB Mann Judd, 61 companies which listed on the Australian Securities Exchange (ASX) raised $2.9 billion in the first half of the year.

This was a significant jump from 12 listings in the first half of 2020 which raised a total of $132 million.

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The jump in assets raised was driven by the 13 large-cap firms which listed during the period compared to just one in the previous first half.

There was a particular dominance by the materials sector which accounted for over half of all IPOs thanks to 26 small-cap listings and five large-cap ones which raised $648.8 million. Following materials, the best-represented sectors were banks, and healthcare equipment and services.

Companies which met their subscription targets, some 87% of IPOs, tended to significantly outperform with those seeing full subscription recording an average of 25% in first-day gains. On the other hand, companies which failed to meet their target saw an average first-day loss of 7%.

Marcus Ohm, partner at HLB Mann Judd Perth, said: “IPO activity was driven by favourable macroeconomic and capital market conditions, combined with strong investor sentiment which reflected the strength of the market as a whole.

“Compared to the wider market, however, IPO performance has been more subdued with a 6% average gain for all listings in the first half of the year, as opposed to an ASX All Ordinaries Index gain of 11%. Despite this, there were still many strong individual performers, with 26% of new listings recording a gain of 20% or more by period end.”

Looking into the second half of the year, Ohm said there were a further 42 proposed listings in the pipeline which were looking to raise $1.25 billion across nine different sectors. Exploration and mining companies had the most IPOs forecast at 27.

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