IPO fund raises decline to $132 million

Just $132 million was raised from initial public offerings (IPOs) in the first half of 2020, a significant reduction from the $823 million raised in the same period a year ago.

This was because there were only 12 IPOs in the first half of 2020, compared to 23 in the same period in 2019, with listings being withdrawn as a result of the COVID-19 pandemic. Atomo Diagnostics was the only large-cap company to list on the index during the period with the other companies sitting in the small-cap space.

Both year’s fund-raising figures were dwarfed by the amount raised in the first half of 2018 which was $2.5 billion.

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The latest HLB Mann Judd IPO Watch Australia Mid-Year report found there were only three listings in the second quarter of 2020, and the rest taking place in the first three months of the year.

HLB Mann Judd partner, Marcus Ohm, said: “There were multiple listings which were subsequently withdrawn during the period amidst difficult market conditions. This is not surprising as market uncertainty and share price volatility do not generally provide a listing-friendly environment given the significant costs involved in undertaking an IPO”.

The full list of companies that chose to list on the Australian Securities Exchange (ASX) were Nyrada Inc, Happy Valley Nutrition, Cosol, Cobre, Emerald Clinics, Thedocyard, Castile Resources, Little Green Pharma, Kaiser Reef, Atomo Diagnostics, AML3D and Intelicare Holdings with most taking place in January and February.

However, for those companies that did decide to take the risk during the period, share price performance had been in their favour.

“Of those companies that successfully listed, overall share price performance was favourable. Newly-listed companies achieved an average gain of 16% compared with the overall 12% recorded on the wider market,” Ohm said.

“Furthermore, one-third of new listings recorded a gain of 35% or more by period end, meaning the IPO market did provide some opportunities for investors in a difficult market.”

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