“Provided the market continues to trade at these levels, my view is that we will see a number of parties come out early in the new year to try to aggressively push stock quotes even before the half-year result,” he says.
The many billions of dollars partly reflect the sophistication of the market before the IPO, which gives companies access to financing options to help develop their business ahead of a stock exchange listing for higher valuations.
“Many of these companies have chosen to access private capital and stay private longer and enter the market once they have more mature business models,” says Cunningham.
Judo Bank is an example of this. It raised hundreds of millions of dollars over five rounds of private funding before being listed in November with a market value of $ 2.3 billion.
“[An IPO] is an opportunity that is open to us, but also the capital we have means that it is something we can do on our terms and our conditions and our timing, ”said co-founder David Hornery in June after the company’s last pre-IPO round of funding. It was successfully built in November.
The hotel trading platform Siteminder was another IPO for a billion-dollar plus in November that relied on private capital to build its business before staging one of the most successful stock market exchanges this year.
The IT service management company Airwallex and the graphic design website Canva are each worth billions and have not yet been published.
The big floats may have set the record, but the large number of floats still deserves attention.
ASX considers 120 annual listings to be an average result in the current IPO cycle, which began in 2013, and 140 listings are considered good.
Just before Christmas, ASX had registered 240 listings – the highest number since a record crop in 2007, which topped 300.
“We are well above the forecast,” Cunningham said.
In 2020, ASX listed only 114 companies despite a strong boost in the second half.
No single sector has dominated this year’s IPOs, which included health (the $ 800 million Australian Clinical Laboratories), industrial (Peter Warren Auto, $ 483 million) and technology stocks (Airtasker, $ 255 million), discretionary consumer (My Food Bag, $ 440 million), fintechs (PEXA, $ 3 billion) and of course mining (29 Metals, $ 960 million).
Investors have not been deterred by the fact that many prominent floaters have not performed according to plan this year.
This includes the consumer finance provider Pepper Money, which trades significantly below its listing price. The same goes for Latitude Financial, which finally hit the market in the third attempt.
The multi-billion dollar float of APM Human Services has never traded at $ 3.55 paid by investors prior to its IPO. Others, like real estate carrier PEXA, trampled on water before recent M&A speculation gave it a boost.
There were also late disappointments like Chalice Mining’s gold assets spin-off Falcon Metals. It fell 37 percent below its 50c IPO at its trading debut Wednesday before Christmas.
Hogg says technology and healthcare companies are expected to support another hot year for IPOs in 2022, but warns that IPO opportunities could close quickly if the market loses confidence.
“Market confidence is quite volatile, it can change very quickly,” he says.
“I’ve seen it too many times in my career where we think everything’s going well and then suddenly something comes out of the blue that just closes the window.”
But ASX says there is already a strong pipeline of companies queuing for a float early in the new year, with graduates across the industrial sector, retail, technology, healthcare and finance.
“When I talk to investment banks, they have a similar perspective,” Cunningham says. “There is this huge demand for investors.”
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