Ventia IPO: Why is it making headlines before the pitch date?

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Ventia IPO: Why is it making headlines before the pitch date?

Ventia, IPO, ASX, Infrastructure
Image source: © Ileezhun | Megapixl.com

Highlights

  • Ventia aims to raise US$812 million through its IPO.
  • The trading of Ventia’s share on ASX will begin on 19 November under the ticker VNT.
  • Ventia IPO has ramped up ahead of its pitch date, as the company had secured institutional order worth half of the deal size.

Infrastructure services provider Ventia Pty Limited is looking to raise US$812 million through IPO. The company aims to raise the money by selling 346.9 million – 364.1 million primary and secondary shares at the bottom of the range, US$2.75 per share.

The targeted net proceeds amount is 12.4 times the forecasted net year profit of 2022 and implies a dividend yield of 6%. The upper range being US$3.15 per share, is 14 times forested net profit and means a dividend yield of 5.4%, as per the company’s prospects.

The trading of Ventia’s share on ASX will begin on 19 November under the ticker VNT, and the IPO will reflect the market capitalisation of US$2.1 to US$2.4 billion. The IPO will remain open till Ventia releases its results in December 2021.

Ventia IPO: Why is it making headlines before the pitch date?

Ventia IPO has ramped up ahead of its pitch date. On Monday, the retail brokers were informed that the company had secured institutional order worth half of the deal size.

What briefing did Ventia give to its potential investors or retail brokers?

In the briefing to retail brokers last week, Ventia asked them to submit offers by Wednesday. The retail brokers included co-lead managers – Forsyth Barr, Morgans and Bell Potter; and co-managers – NAB and Crestone.

Ventia is owned by Apollo Global Management and CIMIC. The briefing highlighted that owners would retain a 22.3% stake and seek to sell approximately 50% stake of the company through its IPO.

Why is Ventia IPO attractive?

The investors participating in Ventia’s IPO will be benefited from the billions of dollars that Australia has pushed into the nation’s infrastructure. In addition to this, the infrastructure that has been built is now extending maintenance opportunities.

Ventia operates across New Zealand and Australia for both cooperation and government. The company will be benefited by extending remediation services as the gas and oil refineries are shut down. Dean Bank, chief executive of Ventia, stated that 80% of 2022 revenue is covered, and AU$15.5 million work is in the pipeline. This indicates the strong position of the company for the coming year.

In October 2021, Ventia announced that water sector clients Yarra Valley Water and Sydney Water have been notched up. As a result, it has been estimated that the water sector will add AU$4.7 million in revenues in 2021-25.

Bottom Line

Ventia has presented strong prospects to the investors in its IPO. The company highlighted that ahead of the pitch date; the company secured institutional order worth half of the deal size. However, there are several risk factors that the investor should not ignore while making the investment decision.

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