IPO watch: How GQG Partners shares performed on ASX debut

Highlights

  • GQG Partners Inc has quoted GQG’s CHESS depositary interests (CDIs).
  • By raising AU$1.187 billion, it has become the biggest IPO of the year.
  • 68% of the shares are retained by the Chief Investment Officer and executive chairman of GQG, Rajiv Jain.

The GQG Partners Inc. (ASX: GQG) shares started trading at AU$2.09 on ASX. The day high for GQG was AU$ 2.13, whereas the day low was AU$1.92 before it started recovering. GQG finally ended in red on the first day of trading. It ended the day at AU$ 1.95 per share, down by 11.36%. The fund managing company has quoted GQG’s CHESS depositary interests (CDIs) on a deferred and conditional basis.

CDIs represent shares of common stock and the ratio of one share of common stock to CDI.

IPO, GQG, ASX

Source: © Ileezhun | Megapixl.com

Largest IPO of year

GQG is the biggest IPO of the year. The company has issued 593,568,707 CDIs over shares at an issue price of AU$2.00 per CDI. AU$ 2 is a lower end in the IPO range of AU$ 2 to AU$ 2.2 per share. The CDI’s were issued under the Broker firm and Institutional offer.

The non-brokered transaction is jointly managed by UBS AG, the Australian branch, and Goldman Sachs Australia Pty Ltd.

The market capitalisation of the fund management company GQG Partners reached AU$ 5.91 billion in lieu of IPO proceeds, which is almost touching the market capitalisation i.e  AU$ 6.6 billion of its biggest competitor Magellan Financial Group Ltd (ASX: MFG).

Of the existing shareholders, the majority of shares are owned by Rajiv Jain, Chief Investment Officer and Executive Chairman of GQG. He owns 2,030,616,054 shares, chiefly retaining a 68.8% stake in the company.

Since its foundation in 2016, the company has shown its ability to generate strong risk-adjusted returns for wealth management firms, sovereign funds, pension funds and financial institutions at the global level.

Why GQG choose to list on ASX?

Tim Carver, former Chief executive at Pacific Current Group, started GQG with Mr Jain back in 2016.

ASX listing will offer the following benefits to the company. Such as:

  • Publicly traded currency can be used for talent acquisition.
  • Increase the financial incentives given to existing and future employees.
  • To enhance its visibility

He stated that with listing on ASX, the company would be benefited from the existing links to the market as the first institutional client was AustrlianSuper in Pacific Current Group.

“By listing, we now have a currency to deepen alignment of our team with shareholders, to give our team equity that has real transparent market validated value and is a real competitive weapon in thinking about recruiting and retaining the intellectual property that really drives our business,” Mr Carver added.

Mr Carver owns 5.6% of the CDI and stated it is essential to invest in its IPO to ensure its success. Investment in the IPO proceeds indicates that the company is invested in the products offered.

Use of IPO proceeds

Proceeds from the offer will be used to pay off selling shareholders and to take care of transaction expenses.

Bottom Line

GQG was making headlines before hitting the ASX, and the market already anticipated the biggest IPO of the year. Through prospects, GQG did highlight the anticipated net profits after tax and the assets under management for the month of June 2022. GQG will be on the investor's radar, and performance will be checked as resources and the energy sector outstrips the wider market.

Also Read: IPO listings: Six companies to make debut on ASX next week

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