Private markets have experienced significant growth over the past few years, resulting in unlisted companies having access to an ever-increasing pool of private funds as an alternative to raising capital on the public market via a listing.

Nonetheless, becoming a public company through an initial public offering (IPO) on the Australian Securities Exchange (ASX) is still an attractive option, offering a number of advantages for the right businesses.

Some of the key features of the ASX include:

  • ASX-listed companies have access to capital from Australia’s substantial superannuation funds industry, which now makes up the world’s fifth largest pension market
  • The ASX is a primary (i.e. main board) exchange, recognised for raising growth capital through follow-on offerings. It has a solid reputation due in a large part to its commitment to upholding sound corporate governance as well as its compliance and oversight regime
  • Compared to other main board exchanges globally, the ASX offers comparatively early entry into the S&P indices, which helps with the liquidity of shares
  • The ASX is recognised as a top 10 global exchange for capital raising
  • It offers early-stage companies the opportunity to list as its admission criteria (i.e. assets test or profit test) have relatively low dollar thresholds compared to other main boards.

As a result of the strength and stability of the ASX, there are a number of benefits to being an ASX-listed company.

Listed companies have easier access to capital to fund their growth compared to private companies. They also have the ability to use shares as the currency for growth (for example, using shares rather than cash to fund a merger or acquisition) and for remuneration (such as employee share schemes).

Listed companies usually enjoy a greater profile, including with potential investors. On top of this, they are more likely to attract institutional investments (i.e. cornerstone/strategic investors) which improves creditability and the chance of accessing capital.

The compliance and corporate governance requirements for listed companies can lead to better practices and an improved internal culture, thus boosting operational efficiency. There is also the benefit of having access to market information to help value the company.

However, being a listed entity is not for everyone.

Some considerations include:

  • Becoming a public company brings with it a higher level of scrutiny from investors and makes it more difficult to strike the right balance between achieving short and long term goals
  • It may result in a reduced level of control for management as it inevitably results in ceding some influence to external shareholders
  • Listed companies have a greater degree of compliance obligations which also means an increase in costs
  • Companies are also more susceptible to market conditions as their share price can be affected by factors beyond the company’s control.

As such, companies should carefully consider whether a public listing is right for them, and assess whether the advantages will outweigh the disadvantages.

This article was first published in the 2025 IPO Watch Australia Report.