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When companies first come public, there's a lot of hype and anticipation. The initial public offering (IPO) roadshow gets investors and media houses very excited, as they await the unfolding of a new story on the stock exchange. Initial Public Offerings in Australia have perhaps been an event of utmost investor traction and upcoming IPOs are the favourite research subject for a lot of market participants.
In this article, we will discuss the upcoming IPOs on the Australian Securities Exchange, but before that, let us brush our understanding of an IPO-
IPO- Why the Hype?
Also referred to as a float or listing, an initial public offering is the process by which a private company, be it new, young or old, opts to go public by sale of its stocks to general public. This happens by getting listed on a stock exchange and can be reckoned as a stock market launch.
So, why go public? The answer is simple- to leverage the many advantages that the stock market exposure offers, a few being-
- Going public is the key to raising money, offering a window of opportunity that unlocks financial doors.
- Besides raising equity capital by issuing new shares to the public (a large audience), an IPO aids the existing shareholder to sell their shares without the need to raise any new capital.
- A company that is offering its shares to the general public is not bound to repay the capital to public investors.
- Through issuance of shares, fresher, lesser-known firms can easily garner publicity, thus expanding their business prospects.
- A reputation is associated to being listed on a main stock exchange, which is a huge inspiration for some firms that take the IPO route.
- IPOs can help growing companies in attracting new talent and offering perks like interesting stock options.
Now that we understand the hype around IPOs, let’s acquaint ourselves to a few upcoming IPOs on the ASX in our next section.
Listing on ASX
The ASX operates at the heart of Australia’s financial markets. A fully integrated exchange, it offers exposure across multiple asset classes – equities, fixed income, derivatives and managed funds. It is an internationally recognised stock exchange and one of the most active stock exchanges when it comes to IPOs. On a regular basis, companies choose to get listed on the exchange. Let’s understand why-
- For many companies, having their securities listed on an internationally recognised stock exchange signifies a new era of growth, raised profile and market significance
- The ASX offers companies with a great means of increasing the number and diversity of security holders
- The ASX offers access to capital in the world’s fastest growing region and has a robust regulatory environment.
- It is also APAC’s largest pool of investable funds, the size and growth of which is underpinned by a mandatory superannuation scheme and associated tax benefits
- Australia is a highly trusted investor hub as it recorded over two decades of uninterrupted economic growth
- Potentially improves the company's public recognition, commercial standing and the company’s investor profile
- Measured by market capitalisation, the ASX comes within top 10 exchanges of the world.
- Being one of the best platforms, it helps to raise the profile of a company to both institutional and professional investors
Interesting Facts and Figures
In January 2020, total capital raised through listings and capital raisings on the ASX amounted to $ 1.3 billion, up by a stupendous 199 per cent on the previous corresponding period (pcp). January 2020 witnessed the admission of 7 new listed entities and the total listed entities at end of month were 2,244.
The half-year results to 31 December 2019 (1H20), ASX’s operating revenue amounted to $ 454.9 million. Amid other factors, this was catalysed by the rise in listings and issuer services supported by higher secondary raisings. The total number of new listed entities in 1H20 were 55, a higher number when compared to the second half of 2019.
Upcoming Listings on ASX
Let us now graze through few of the upcoming floats on the ASX that investors and other market participants seem keen on-
Bottomline
With a number of companies continuing to choose the golden opportunity of going public on the ASX, a lot of action can be anticipated in the days to come. An IPO is ideal for reaping profits, as the early birds will be one of the first investors to truly utilise the company’s potential and hit right in the bull’s eye. Moreover, availability of shares at cheaper rates and the possibility of its value to increase over time will continue to attract new and experienced investors alike.
