A challenging environment ahead for IPOs

There were 62 new listings on the ASX in 2019, down significantly from the 93 listings of the previous year.

The number of listings in 2019 appears to reflect a return to more typical levels of activity, after strong years between 2015 and 2018 in the IPO market, which averaged 96 listings a year.

Looking back further, the year’s activity was broadly similar in terms of number of listings to the average of new listings from 2012 through 2015, of 61 new listings. The reduction in listings in 2019 was mostly apparent in Western Australia, with only 10 new listings for the year compared to 40 listings the prior year.

The fall in listings resulted in a decrease in total funds raised during the year. In 2019, $6.91 billion was raised which was 18% less than in 2018 when $8.44 billion was raised.

An underlying factor in the decline in total funds raised was the fall in the number of companies raising over $1 billion with the largest capital raising in 2019 being $925 million, compared to 2018 when there were two listings raising $3.98 billion between them.

Despite the decline in total funds raised, there was an increase in the average amount raised, to $112 million in 2019 compared to $91 million in 2018. This reflects the relative lack of contribution by small caps in 2019.

This year’s report, authored by Marcus Ohm, provides a detailed summary of IPO activity within Australia for 2019. Produced annually, it includes analysis on key aspects of the market including:

  • Share price performance
  • Sector analysis
  • IPO subscription rates
  • Review of activity by quarter
  • Resources sector performance
  • The road ahead for 2020.

This year’s report also features articles authored by Simon James, Jude Lau and Nicholas Guest.