IPO activity remains low but possible green shoots emerging
The challenging economic environment continues to weigh heavily on the market for initial public offerings (IPOs) so far in 2024, with higher interest rates and persistent inflation restricting listing activity. Despite record rises in the Australian share market, there has been just 13 listings in the first six months to June 2024, one fewer than in the same period last year. This follows a lacklustre year for IPOs in 2023, when the total funds raised from ASX listings was $847 million, the first time since 2012 where the total amounts raised did not exceed $1 billion.
Report summary
- Just 13 new listings on the Australian Securities Exchange (ASX) in the first six months to June 2024, one fewer than in the same period last year.
- Total funds raised in the first six months of 2024 were $809.5 million, an increase of 440% compared to the same period last year ($149.9 million).
- While there were only three large cap* listings during the first half of 2024, this included two companies with a market capitalisation exceeding $1 billion at listing, contributing $660.1 million in total funds raised.
- During the first half of 2024, six industry sectors contributed new listings during the period, up from three sectors in the first half of 2023. Materials listings dominated, comprising seven of the 13 listings in the period.
- The average first day gain across all new listings was 32% for the first six months of 2024, compared to the average first day gain of just 6% for the full 12 months of 2023.
- Encouragingly, new IPOs performed well relative to the wider share market, with the ASX All Ordinaries closing just above 8,013 at the end of the period.
The 2024 IPO Watch Australia Mid-Year Report includes commentary and data analysis on share price performance, sector analysis, IPO subscription rates, a review of activity for the first two quarters of the year, and the market outlook for the remainder of the year.
* 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.
IPO Watch Australia Mid-Year Report
A snapshot of Australia's recent listing activity
Download the reportAustralia's 2024 IPO outlook
As of 30 June 2024, there are four upcoming listings registered with the ASX, seeking $111 million in initial capital. This excludes Alcoa Corporation, which is not raising any capital as part of its listing for the issue of CHESS Depositary Interests (CDIs) related to its acquisition of Alumina Limited.
Three of the four upcoming listings are exploration companies with projects in Western Australia and Brazil.
Within Australia, the economic outlook does not appear likely to improve dramatically in the coming months, given ongoing uncertainty regarding the direction of interest rates and macroeconomic conditions. Whilst there has been an uptick in pre-IPO activity, this has not yet been reflected in IPO volumes on the ASX.
"Uncertainty persists regarding a recovery in the IPO market. However, there are positive signs, with the two large IPOs of the period being fully or oversubscribed, highlighting that there is investor appetite for quality businesses listing on the ASX."
Corporate & Audit Services Partner
Key findings
About IPO Watch Australia
First published in 2004, IPO Watch Australia is a benchmarking-based report. The research analyses Australian listing activity. The primary report is released in January, and it explores IPO activity over the previous 12-month period. The Mid-Year Report is a short-form report published in July and it focuses on market activity for the first six months of the year. The reports are authored by Marcus Ohm, a corporate & audit services partner from HLB Mann Judd Perth.
About HLB Mann Judd
We are an association of award-winning accounting and advisory firms in Australia, New Zealand and Fiji. Our firms currently audit over six percent of all ASX-listed companies and 10 percent of all ASX-listed resources companies in Australia. In addition to audit-related services, HLB Mann Judd provides a broad range of advisory and tax services. We can assist with the preparation for an IPO and in evaluating the benefits of an IPO against alternative strategic options.