Marcus Ohm

Australia’s IPO market in 2024 saw its lowest activity in two decades with only 29 listings, according to HLB Mann Judd’s latest 2024 IPO Watch Australia Report, marking a 9 per cent decline on the 32 listings in 2023.

At the same time, it also experienced a considerable increase in funds raised compared to 2023.  Total funds raised surged 387 per cent to $4.1 billion, compared to $847 million in 2023.

Marcus Ohm, corporate & audit services partner at HLB Mann Judd Perth and co-author of the research, says the poor listing volumes reflect another challenging year for the IPO market, with significant macro and political factors globally.

“The 29 listings in 2024 were the lowest number of listings since our first report in 2004, and so far there is little sign of numbers improving in the first half of 2025.

“However, in more positive news for the market, there were 11 large cap listings in 2024 compared to seven in 2023.  These large caps contributed 96 per cent of the total funds raised, with three listings with market caps in excess of $1 billion who collectively raised $2.7 billion,” Mr Ohm says.

The largest IPO of 2024 was DigiCo Infrastructure REIT (ASX: DGT), which raised $1.995 billion in December and was the first IPO to surpass the $1 billion mark since 2021. The second largest raising of the year was Cuscal Limited (ASX: CCL), which raised $336.8 million. 

The Materials sector continued to dominate the IPO market, accounting for 13 listings which represents 45 per cent of total IPOs. However this was a percentage decline from 72% in 2023, and also a decline on the five year average of 56 per cent.

Mr Ohm says the decline in the number of Materials companies listing is largely due to unfavourable conditions for battery metals. 

“Conditions for junior exploration companies have been unfavourable particularly through the second half of 2024.  Only just over half the companies in this sector achieved their target subscription.”

Overall, ten industry sectors were represented with new listings in 2024, an increase from 2023 when only seven sectors were represented. Notably, the Software & Services sector did not record any new listings for the first time since 2010, underscoring ongoing challenges in the technology space. 

The average year end gain for new listings was 12 per cent which exceeded the ASX All Ordinaries Index gain of 8 per cent.  This contrasts favourable with 2023 when new listings recorded an average year end loss of 10 per cent (compared to an ASX gain of 9 per cent).  In total, 38 per cent of new listings recorded a year end gain compared to issue price.

Mr Ohm says the overall trend suggests that while the IPO market continues to be historically subdued, there are some positive signals in the amounts raised in 2024, and the year end gains achieved.

“Nonetheless there continues to be a high degree of uncertainty, including an upcoming federal election, making it difficult to predict when the IPO market in Australia will experience any substantial rises in activity. 

“The outlook for 2025 is unclear, with the initial public offering pipeline for early 2025 limited to only three small cap listings. 

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Marcus Ohm

The challenging economic environment continues to weigh heavily on the market for initial public offerings (IPOs) so far in 2024, with higher interest rates and persistent inflation restricting listing activity, according to the latest HLB Mann Judd IPO Watch Australia Mid-Year Report.

There have been just 13 listings in the first six months to June 2024, one fewer than in the same period last year. This follows a lacklustre year for IPOs in 2023, when the total funds raised from ASX listings was $847 million, the first time since 2012 where the total amounts raised did not exceed $1 billion.

Marcus Ohm, author of the report and partner at HLB Mann Judd Perth, said while the number of listings was down compared to the first half of 2023, the good news was that the capital raised was much higher than the first half of 2023, and almost the same as the full 2023 year due to the presence of two larger listings during the period.

“Total funds raised in the first six months of 2024 were $809.5 million, an increase of 440 per cent compared to the same period last year ($149.9 million). While there were only three large-cap listings during the first half of 2024, this included two companies with a market capitalisation exceeding $1 billion at listing, which contributed $660.1 million in total funds raised,” he said.

Materials company Metals Acquisition Limited (ASX: MAC) was the first big listing of the year in February, raising a total of $325 million. That was followed by the June listing of Mexican-themed restaurant chain Guzman y Gomez Limited (ASX: GYG), when $335 million was raised from investors.

According to Mr Ohm, looking ahead, uncertainty persists regarding a recovery in the IPO market. However, there are positive signs, with the two large IPOs of the period being fully or oversubscribed, highlighting that there is investor appetite for the right listing on the ASX.

“Both Metals Acquisition and Guzman y Gomez were popular with investors, and both performed well on their first day. More generally, the share price performance of new listings during the period was an improvement on the previous year.

“The average first day gain across all new listings was 32 per cent for the first six months of 2024, compared to the average first day gain of just 6 per cent for the full 12 months of 2023. By the end of June 2024, the average increase over the listing price was 13 per cent, compared to an average year-end loss in 2023 of 10 per cent,” Mr Ohm said.

“New IPOs performed well relative to the wider share market, with the ASX All Ordinaries closing just above 8,013 at the end of the period, representing a 2 per cent increase for the period. IPOs performed much better, indicating a positive investor appetite for new listings,” he said.

“However, the extent of any wider recovery in the Australian IPO market remains to be seen, given current economic challenges and inflationary concerns,” Mr Ohm said.

“There are not yet any significant volumes in the near-term pipeline, with only four upcoming listings registered with the ASX (at the time of writing), three of which are Materials companies,” he said.

As of 30 June 2024, the four upcoming listings registered with the ASX were seeking $111 million in initial capital. This excludes Alcoa Corporation which is not raising any capital as part of its listing for the issue of CHESS Depositary Interests (CDIs), representing a share in Alcoa stock in the US.

During the first half of 2024, six industry sectors contributed new listings during the period, up from three sectors in the first half of 2023. Materials listings dominated, comprising seven of the thirteen listings in the period. The largest listing was in the Consumer Services sector with Guzman y Gomez, followed by the Materials company Metals Acquisition.

All six sectors recorded a first day gain on average. Both the Materials and Diversified Financials sectors recorded average first day gains of 40 per cent across all listings, followed by Consumer Services, with Guzman y Gomez up 36 per cent.

Breaking listings down by size, of the 13 listings in over the first half of 2024, most were small cap listings (companies with a market capitalisation of less than $100 million at the time of listing). Small cap listings raised $90.5 million across 10 listings during the period, contributing just 11 per cent of the total funds raised, in contrast to the first half of 2023, when small caps contributed 67 per cent of total funds raised.

The average amount raised per listing by small caps increased marginally to $9.05 million in 2024 compared to the average of $8.3 million in the first half of 2023, a 9 per cent increase.

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Marcus Ohm

There was a marked deterioration in the initial public offering (IPO) market in 2023, with just 32 listings for the whole year, according to the latest HLB Mann Judd IPO Watch Australia Report.  This was lowest number of annual listings yet measured by the report since it started in 2004.

The 2023 level was 63 per cent lower than the 87 listings in 2022 and 83 per cent lower than the record-breaking number of 191 IPOs in 2021.

There were just 14 listings in the first six months to June 2023 and a further 18 in the second half of the year. January recorded the highest number of floats, with six listings. The total funds raised for the year were $847 million, reflecting a 21 per cent fall compared to 2022 when the total funds raised were $1.07 billion. Last year was the first time since 2012 where the total amounts raised in ASX listings did not exceed $1 billion.

Marcus Ohm, author of the report and partner at HLB Mann Judd Perth, says the slowdown of listings started in the second half of 2022 and continued throughout 2023.

“The macroeconomic and geopolitical environment both in Australia and across the globe, including high inflation and rising capital costs, presented significant challenges for most companies seeking to list.

“These challenging conditions, combined with poor investor sentiment throughout 2023, meant that an IPO listing was not an attractive or viable option for many companies during the year,” Mr Ohm said.

Continuing the trend of the past few years, Western Australia recorded the highest number of listings, with 15 listings, of which all were from the Materials sector. South Australia failed to register a listing in 2023 despite having at least one new listing every year for the past 15 years.

The resources sector (representing both the Energy and Materials sectors) dominated the IPO market. The Materials sector contributed 23 listings, accounting for 72 per cent of all new listings in the year. In 2022, Materials also made up 72 per cent of all new listings.

Mr Ohm said that the current pipeline of listings remains very subdued with many businesses waiting for an improvement in economic conditions before making a decision to list.

At the time of writing, only five upcoming floats were registered with the ASX. The highest amount being sought was just $10 million, indicating that the IPO market will continue to remain subdued in coming months until there are significant changes in the macroeconomic and geopolitical environment.

“The environment is likely to remain tough for companies in all industries, including the resources sector, particularly if the RBA continues to raise interest rates. However, if the gold price remains above the US$2000 level, or lithium goes on a run, this might act as a catalyst for greater interest in the junior explorers and a higher level of IPO activity overall.”

In terms of price action, a total of 18 listings on the ASX experienced a first-day gain, with an average gain across all new listings of 6 per cent, down from a 16 per cent gain in 2022. Reflecting the tough market conditions, however, only 11 were able to maintain their listing price or move higher by the year’s end. As at 31 December 2023, the average loss across all listings against IPO price was 10 per cent. This represents a larger loss compared to 2022, where a year-end loss for IPOs of 2 per cent was recorded.

Of the 32 listings in 2023, there were seven large cap listings (companies with a market capitalisation over $100 million) representing 22 per cent of the total listings. By comparison, of the 87 listings in 2022 there were 9 large listings, representing 10 per cent of total listings.

“Large cap listings contributed 76 per cent of the total funds raised in the year. On average, each large cap raised $92.5 million, with Redox Limited (ASX: RDX) securing the largest amount of $402 million,” Mr Ohm said.

In the small-cap market (companies with a market capitalisation of $100 million or less), the $10 million to $25 million band raised the highest amount of funds, reaching $68.39 million. This represented 8 per cent of the total amounts raised during the year.

On a positive note, 29 of the 32 listings were able to raise their subscription target amount. This represented 91 per cent of all listings and an increase from 70 per cent in 2022, the report reveals.

Listings in the $50 million to $75 million market cap band recorded the best share price performance, with the first-day loss against the IPO issue price of 10 per cent, increasing to a year-end gain of 29 per cent, delivering a healthy return to investors.

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Marcus Ohm

The market for initial public offerings (IPOs) has ground to a halt in 2023, with just 14 new listings in the first six months of the year, according to the latest HLB Mann Judd IPO Watch Australia Mid-Year Report.

This is a sharp decline on the same period last year when there were 59 new listings, and also a significant drop on the second six months of 2022 which saw 28 listings.

Marcus Ohm, author of the report and partner at HLB Mann Judd Perth, says the first half of 2023 has proven to be one of the most challenging periods for IPOs in Australia.

“The first half of 2023 has been one of the quietest six-month periods for IPOs since the late-2000s – lower even than during the global financial crisis or the height of the COVID-19 pandemic.

“The lack of activity reflects the persistently difficult environment for IPOs that emerged towards the end of 2022, when there was a noticeable slowdown in IPO activity in the second half of the year.

“This market remains difficult going into the second half of 2023, thanks to the combination of unfavourable macroeconomic factors and poor investment sentiment.  Of the 14 listings in the first half of the year, six were in January, three in February and March, and only five in the whole of the second quarter. However, there are signs the market will improve in the second half of 2023 and into 2024,” he says.

The lack of new listings in the six months of the year meant there was also a significant decline in the overall amount raised.

A total of $150 million was raised during the period, representing an 81 per cent reduction from the $790 million raised in the same period of 2022 and a further fall from the $2.9 billion raised in the first half of 2021.

There were 12 small cap listings*, and just two large cap listings during the period, which raised $50 million in total.

Mr Ohm says despite the significant fall in overall funds raised, the 12 small cap listings raised $8.3 million each on average.

“This is a slight increase on the average of $7.6 million raised in the same period in 2022.  However the $50 million raised by the two large cap listings was significantly lower than the $384.4 million raised in the first half of last year.

“The companies that completed their IPOs were generally successful in achieving their subscription levels, with 92 per cent achieving their target compared to 73 per cent for the same period in 2022.”

Mr Ohm said the pipeline for IPOs as at 30 June 2023 was limited, at this stage, however some larger potential floats may come to market later in the year.

“There was just 11 potential upcoming floats listing on the ASX, seeking to raise $693 million.  One has already listed in July – Redox Limited (ASX: RDX) which raised $402 million.

“Of those in the pipeline, seven are Materials companies, reflecting the ongoing dominance of the resources sector.  In the first six months of the year, there was only one listing outside of the resources sector, Acusensus Limited (ASX: ACE) which listed in January.

“More than half of the 12 Materials companies that listed in the first half of the year were from Western Australia, which has historically been a strong contributor to the small cap Materials listings, and we expect this trend to continue for the remainder of 2023 and into 2024.

“Surprisingly, only two of the materials companies that floated in the first half of the year were exploring for gold as a primary commodity, despite the supportive outlook for gold.

“Overall, we expect the remainder of 2023 to be challenging for the IPO market, with tight capital markets.  The degree of uncertainty across global markets, weaker indicators, and a slowdown in the world economy, are all impacting the IPO market. That said, we expect a level of improvement in the second half of the year and into 2024,” he says.

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Marcus Ohm

2021 was an exceptionally strong year for initial public offerings (IPOs) with the market recording the highest number of new floats in a decade, and more than the previous two years combined, according to the latest HLB Mann Judd IPO Watch Australia Report.

The report analyses IPO* activity over the past 12 months on a number of key metrics, including listing volumes, share price performance, industry spread and overall trends, as well as a review of the pipeline for 2022.

There were 191 IPOs in 2021, up from 74 in 2020 and 62 in 2019.  In total, these IPOs raised $12.33 billion, a significant increase on 2020 ($4.98 billion).

The year also saw an increase in the number of large companies listing, with eight companies having a market cap on listing in excess of $1 billion.  The three largest IPOs in 2021 raised $3.34 billion in total, representing 27 per cent of the total funds raised for the year.

Marcus Ohm, author of the report and partner at HLB Mann Judd Perth, says that the surge of new companies coming to market was especially strong in the second half of the year.

“The volume of activity increased significantly in the second half of 2021 with 68 per cent of new listings occurring in the final two quarters.

“Activity was driven by the availability of capital underpinned by attractive investment fundamentals, sustained by strong levels of sentiment and a buoyant share market.”

He said that the levels of available capital in the market was further supported by the increase in subscription rates.

“During the course of the year, 87 per cent of IPOs met or exceeded their capital raising goals, an increase on the five-year average of 83 per cent.

“In addition, IPOs on average experienced strong share price performance subsequent to listing, recording an average first day share price increase of 20 per cent.  In total, 115 companies (60 per cent of all IPOs) ended their first day above their listing price.

“This strong performance was maintained at the end of the year with an average increase in share price of 17 per cent across all IPOs.  However these averages hide a number of individual outliers, with 50 companies recording a year end gain of 20 per cent or more, and 57 a year end loss of 20 per cent or more.”

The year also saw a significant increase in the number of small cap listings, with 145 companies with a market cap of less than $100 million entering the market.  This is almost double the five-year average.

Small cap listings represented 76 per cent of new market entrants for 2021, and raised a total of $1.38 billion (11 per cent of total funds raised during the year).   The most active segment for the year was the $10-25 million bracket, with 70 IPOs making up 48 per cent of all small cap listings.

“The small cap sector was dominated by the Materials sector which made up 68 per cent of listings in this bracket, and was the strongest performing industry sector overall, with 107 new entrants during 2021 (compared to 24 in 2020).”

Looking ahead, Mr Ohm said the pipeline continues to look strong for 2022.

“At the end of 2021, there were 27 companies which had applied for listing to the ASX, a significant increase from the 14 companies at the same time the previous year.  These companies are hoping to raise $250.4 million.

“The Materials sector looks set to continue dominating in early 2022, with 17 of these proposed listings, and 45 per cent of funds sought, coming from this sector, and over three-quarters of these relate to gold projects.

“Overall, the numbers suggest IPO activity will remain strong in the first part of 2022,” Mr Ohm said.

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Marcus Ohm

The Australian IPO market has continued its rebound from the COVID-induced slump in the first half of last year, with a particularly strong start to the year that saw 61 companies listing on the Australian Securities Exchange, according to the latest HLB Mann Judd IPO Watch Australia Mid-Year Report.

This compares to just 12 listings in the same period in 2020, and 74 listings for the whole of 2020.

The report analyses IPO activity over the first six months of the year on a number of key metrics, including listing volumes, share price performance, subscription rates and sector spread, as well as a review of the pipeline for the remainder of 2021.

According to the report, this year’s strong performance is particularly evident in terms of total amounts raised.

“Overall, $2.9 billion has been raised by new market entrants in the first six months of 2021, compared to only $132 million in the first half of 2020,” says Marcus Ohm, partner at HLB Mann Judd Perth and author of the report.

“This increase in total funds raised was driven by the 13 large cap^[1] IPOs coming to the market so far in 2021, compared to just one in the first half of 2020.

“However the small cap end of the market was also very active, with 48 new entrants (compared 43 for the whole of 2020) who raised a total of $462 million.  The main contributor to this activity was the Materials sector which had 26 new small cap listings, compared to only three in the same period in 2020.

“Interestingly, while Materials listings are normally small caps, a total of five of the 13 large cap IPOs in 2021 were from the Materials sector.  Both gold and copper projects were well represented, with 20 new entrants holding gold projects and 5 holding copper projects.

“In total, the Materials sector accounted for 51 percent of all IPOs so far this year, and raised $648.8 million,” Mr Ohm said.

Overall, there was a diverse range of sectors represented by IPOs in the first half of 2021, which again compares favourably with the same period last year.  A total of 17 sectors were represented compared to six in the same period of 2021.

Outside of the Materials sector, the strongest contributors to total funds raised were listings within the Banks sector and the Health Care Equipment & Services sector.

Mr Ohm said the market was generally favourable towards IPOs in the first half of 2021.

“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 six percent average gain for all listings in the first half of the year, as opposed to an ASX All Ordinaries Index gain of 11 percent.  Despite this, there were still many strong individual performers, with 26 percent of new listings recording a gain of 20 percent or more by period end.

“Looking ahead, the pipeline at the end of June 2021 was healthy with 42 proposed listings seeking to raise a combined $1.25 billion.  This compares to just a single proposed listing at the end of June 2020, and seven at the end of June 2019.

“There continues to be a wide range of companies planning to list, with nine industry sectors represented.  Exploration and mining companies are set to be the strongest contributors, with 27 listings looking to raise a total of $707.4 million.  As seen in the first half of the year, companies holding gold and copper projects are the primary drivers of IPO activity in the Materials sector,” Mr Ohm said.

——–

[1] Large cap companies are defined as those with a market capitalisation in excess of $100 million. Small cap, companies are defined as those with a market capitalisation of $100 million or less. All data excludes property trusts.

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Marcus Ohm

Despite a relatively slow start to the year for initial public offerings (IPOs), new listings have performed well in terms of share price with good subscription levels for the six months to 30 June, according to the HLB Mann Judd IPO Watch Australia Mid-Year Report.

The first six months of 2019 was subdued with only 23 companies listing but according to HLB Mann Judd partner and author of the report, Marcus Ohm, this was possibly reflective of equity market conditions towards the latter half of 2018, and also a fall in the number of materials companies listing.

“The majority of listings this year occurred in the second quarter, which is in contrast to 2017 and 2018 which saw an even spread of IPOs throughout the year.

“A total of $823 million was raised during the H1 of this year which, again, is significantly down on the previous two years with $2.5 billion and $1.9 billion being raised in the first half of 2018 and 2017 respectively,” he said.

The small cap sector (less than $100 million market capitalisation at listing) has been notably subdued with only 13 listings. In comparison, 2018 recorded 31 small cap listings in the same period and 72 over the 12-month period.

Mr Ohm said an underlying reason behind the drop in IPOs this year compared with the last couple of years has been the materials sector.

“Materials had only three new listings for the period, compared to 16 for the same period last year. The reduced activity perhaps reflects broader macroeconomic issues and current investor sentiment,” he said.

From a share price perspective, however, IPOs have performed well, with 17 of the 23 IPOs recording first day gains for an average gain of 21%. In terms of share price growth post-listing, this performance continued with an average gain of 63% across all new entrants from listing to 30 June 2019.

“This is a particularly good result and represents a return to the trend of IPOs tending to outperform the market which has itself had a good six months. The majority of industry sectors also performed well, with ten sectors recording first day gains, and ten sectors also recording positive gains on average to 30 June 2019,” said Mr Ohm.

There was improvement in IPO subscription rates for those companies that did list during the first six months of 2019 compared to the prior corresponding period. A total of 19 new listings (83%) met their subscription targets compared to 74% in the six months to 30 June 2018.

“While the volume of IPOs was lower than in recent years, those companies which did list generally were well supported by investors both at listing and also subsequently,” said Mr Ohm.

The report provides a summary and high-level analysis of IPO activity within Australia and is produced on a six-monthly basis. It includes a review of activity during each period as well as detailed analysis and case studies.

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Marcus Ohm

The number of initial public offerings (IPOs) in 2017 was the highest since 2007, signalling the ongoing good health of the market and improved investor sentiment, according to the latest HLB Mann Judd IPO Watch report.

There were 110 new listings during the year, an increase of 17 percent on 2016, and also an improvement on the five-year average of 83 listings.

Marcus Ohm, author of the report and partner at HLB Mann Judd Perth, said there has also been a shift towards more small cap listings in recent years, which were generally well supported by the market.

“In fact there has been a marked shift in the past two years towards an increasing proportion of the IPO market being made up of small cap companies – those with a market capitalisation of less than $100 million.

“In 2017, 88 small cap companies completed an IPO, making up 80 percent of all listings. This was a solid increase of 38 percent over 2016’s 64 small cap listings and a 68 percent increase over the previous five-year average of 52 listings.

“New listings significantly outperformed the wider market in 2017 in terms of year-end share price gains, with an average increase in share price of 46 percent across all new IPOs, and 56 percent within the small cap sector specifically.  This compares favourably against the ASX 200, which nonetheless recorded a solid increase of seven percent overall.

“Overall, investor sentiment towards the IPO market appears reasonably healthy, with 79 percent of IPOs meeting or exceeding their capital raising goals.  In total, new IPOs obtained 94 percent of the total funds being sought.

“In a sign of increasing market confidence, the underwriting of offers continues to decrease, with only 25 percent of offers being underwritten this year, compared to 31 percent in 2016 and 44 percent in 2015.

Mr Ohm said that the high number of small cap listings meant that the total funds raised in the year was less than previous years.

“Total funds raised decreased significantly in 2017 compared to 2016, from $7.5 billion to $4.1 billion.  This was also well below the three-year average of $6.2 billion, reflecting the past contribution of large cap companies.

“Notably, there were no listings in 2017 with a market capitalisation in excess of $1 billion.

“In total, small cap companies raised $1.1 billion of the total raised for the year, or 28 percent, compared to 11 percent in 2016.”

Mr Ohm added that during 2017 there was a resurgence in the Materials sector, reflecting improved commodity prices and investor sentiment.

“The Materials sector recorded the most listings for the year, with 29 listings representing 26 percent of all IPOs.

“Interestingly, the Software & Services sector, which has been a significant contributor of new listings in recent years, experienced a decline.

“Other notable sectors last year include the Investments sector with 10 listings, and Pharmaceuticals, Biotechnology & Life Sciences with seven listings.  It is likely the latter sector will continue to generate new listings, particularly within the medical marijuana area.”

Looking ahead, Mr Ohm said that 2018 appears set to build on the success of 2017, with the Materials sector again poised to be a significant contributor.

“At the start of the year, there were 37 companies who had applied for listing, an increase of 61 percent over the start of 2017.  Materials and technology stocks make up the bulk of the proposed listings, with nine and eight listings respectively.

“Overall, the pipeline appears to be relatively healthy, and reflective of improved market conditions and investor sentiment,” he said.

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