3 Things Not Working In Favour Of IPOs (ASX witnesses sixth IPO pulled in the past fortnight with Onsite Rentals)

Any company exercising to offer its initial public offering (IPO) makes its shares available to the public in a fresh stock issue process, which results in the evolution of a private company to a public company. Through IPO, the company strives to gain access to raising money for growth and expansion purposes.

The past fortnight has been a roller coaster ride for some of the companies expecting to be issuing their IPOs on the ASX. Several companies looking forward to listing their securities afresh on the ASX have steered a withdrawal from the listing process.

With back to back events of IPO withdrawals, investors are in speculation if the IPOs are out of the woods. Let’s explore the possible reasons that led to the withdrawal of the IPOs and putting the company’s reputation on the line.

Onsite Rentals withdraws IPO worth ~$150 million

The last IPO withdrawal on ASX was noted to be made by Onsite Rentals, a renting services company. As per media sources, Onsite Rental’s IPO withdrawal was the sixth IPO to be cancelled on ASX worth more than $150 million.

Onsite Rentals offers a diversified portfolio of renting services coupled with technically equipped products such as washroom in buses, Segway, heater, air cooler, hand wash, outdoor air conditioner, tower air conditioner, portable toilet vans, and many more. Onsite Rentals attempt to develop and deliver luxurious and best quality products ‘on rent’ with the latest technology, exquisite designs, and cost-effective assortment.

Recent IPO Failures

Let’s talk about some other IPO offers that were anticipated to be very promising yet failed to see a successful listing.


Another abandonment of the IPO came from PropertyGuru, a South-east Asian real estate portal. The company lodged its prospectus with the ASX on 23 October 2019 for a highly anticipated float on the ASX.

However, PropertyGuru pulled back its IPO, referring to the uncertainty in the current IPO market. Though PropertyGuru was backed by strong investor support from both global and Australian investors, the company decided to abandon the process.

Retail Zoo

As per media reports, the Boost Juice owner Retail Zoo’s IPO was pulled by Bain Capital, a private equity firm. The planned line up of the IPO was scheduled for November and was pulled back as an implication of the looming IPO market conditions in current times.

Education Centres of Australia

The third upset in the IPO market on ASX came from the education services sector with the postponement of the IPO offer by Education Centres of Australia. According to major media sources, the upset came as an implication of the expected potential partnerships before fronting listed equities investors.

Pertaining to a recent meeting with the Indian Prime Minister, ECA has a handful of potential university partnership deals in the pipeline in India as well as Australia.

MPC Kinetic

MPC Kinetic, a company operating in the energy and resource industries, witnessed fluctuations in the price and volume of a private equity sell-down by the end of the book build. The evolution process of the company from the private company to a public company has been placed in halt currently.

Latitude Financial Group

Latitude Financial Group lodged its prospectus with the Australian Securities Exchange (ASX) in the month of September 2019, which was later withdrawn from the market in October 2019. As per the company report, one of the reasons for scrapping the IPO was that the company board’s and the shareholders’ low confidence about the strong aftermarket for Latitude.

To learn more about the scrapping of Latitude’s IPO, click here.

Reasons for IPO Failure

Let’s figure out the possible reasons for such back to back upsets to the IPO market.

Uncertainty in the global IPO market

The global IPO market is said to be impacted by the increasing geopolitical uncertainties and trade issues among the major countries. The international market witnessed significant volatility and global growth concerns in response to the ongoing US-China trade war. The countries are negotiating their terms of trade agreements with other countries, creating a rumble with looming clouds of uncertainties.

Some recent events of poor response in the global IPO market are as follows:

  • Peloton Interactive Inc.’s tumbled in its first day of trading,
  • Uber dropped significantly below IPO price, valuing the company at something very less than anticipated,
  • WeWork, the coworking company, pulled back its IPO filing from the market,
  • Saudi Aramco’s IPO was also pulled off the market with a delay for a month or more.

ASX Market Performance Lacking Animal Spirit

The financial decision making involves various emotions like confidence, courage, fear, pessimism etc. As stated by eminent researchers, it is imperative for the investor to gain control of one’s emotions since it can set in motion or hinder economic growth. The low spirits impact the confidence level of the investor, ultimately driving down the market, and vice versa.

The increasing international trade uncertainties have influenced the investor’s animal spirit by plummeting confidence. According to ASX, 2018 has been a bad year for most investment assets, with over 90 % of multi-asset US-dollar returns classes showing gloomy returns.

Figure 1 Shares posting negative returns (Source: ASX)

Through the lens of the Australian shares, there has been a 6% decline in the S&P/ASX 200 index in 2018. In addition to this, suggesting the low bullishness in Australian equity prices is a decline in the price index, which is lower than it was three years ago.

Herd Mentality

Herd mentality refers to the act of copying what others are doing. In finance, herd mentality refers to the tendency of investors to trail and duplicate what others are doing, majorly under the emotional influence, rather than their own independent analysis.

The unfavourable market outlook and back to back IPO failures impacting the valuation of the company are anticipated to influence the companies to pull back their IPO listings. In reference to the cancellation of its IPO listing after the bookbuild, Latitude management said,

‘Despite extensive engagement with prospective investors, the Board and shareholders have determined not to proceed with the offer’

‘The company board and the shareholders were conscious about the significance of ensuring a strong aftermarket for Latitude’

As per media sources, Onsite Rentals also pulled off its IPO from the market on bookbuild day.


At a time when investors are facing trade disputes, Middle East tension, record low interest rates, slower major economies, and many more global uncertainties, it becomes difficult to ascertain a dish fit for the gods. The IPO market in Australia is subject to feel the heat from the global economic and geopolitical challenges.


This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK