The Australian IPO market has continued its rebound from the COVID-induced slump in the first half of last year, with a particularly strong start to the year that saw 61 companies listing on the Australian Securities Exchange. This compares to just 12 listings in the same period in 2020, and 74 listings for the whole of 2020.

HLB Mann Judd’s IPO Watch Australia Mid-Year Report analyses IPO activity over first six months of the year on a number of key metrics, including listing volumes, share price performance, subscription rates and sector spread, as well as a review of the pipeline for the remainder of 2021.

According to the report, this year’s strong performance is particularly evident in terms of total amounts raised. Overall, $2.9 billion has been raised by new market entrants in the first six months of 2021, compared to only $132 million in the first half of 2020. This increase in total funds raised was driven by the 13 large cap* IPOs coming to the market so far in 2021, compared to just one in the first half of 2020.

However the small cap end of the market has also been very active, with 48 new entrants (compared 43 for the whole of 2020) which raised a total of $462 million. The main contributor to this activity was the Materials sector which had 26 new small cap listings, compared to only three in the same period in 2020.

In total, the Materials sector accounted for 51 percent of all IPOs so far this year, and raised $648.8 million. Overall, there was a diverse range of sectors represented by IPOs in the first half of 2021, which again compares favourably with the same period last year. A total of 17 sectors were represented compared to six in the same period of 2021.

IPO activity to date in 2021 has been driven by favourable macroeconomic and capital market conditions, combined with strong investor sentiment. Compared to the wider market, however, IPO performance has been more subdued with a six percent average gain for all listings in the first half of the year, opposed to an ASX All Ordinaries Index gain of 11 percent. Despite this, there were still many strong individual performers, with 26 percent of new listings recording a gain of 20 percent of more by period end.

Looking ahead, the pipeline at the end of June 2021 was healthy with 42 proposed listings seeking to raise a combined $1.25 billion. This compares to just a single proposed listing at the end of June 2020, and seven at the end of June 2019.

*Large cap companies are defined as those with a market capitalisation in excess of $100 million. Small cap, companies are defined as those with a market capitalisation of $100 million or less. All data excludes property trusts.