2021 was an exceptionally strong year for initial public offerings (IPOs) with the market recording the highest number of new floats in a decade, and more than the previous two years combined.
There were 191 IPOs in 2021, up from 74 in 2020 and 62 in 2019. In total, these IPOs raised $12.33 billion, a significant increase on 2020 ($4.98 billion).
The year also saw an increase in the number of large companies listing, with eight companies having a market cap on listing in excess of $1 billion. The three largest IPOs in 2021 raised $3.34 billion in total, representing 27 per cent of the total funds raised for the year.
The volume of activity increased significantly in the second half of 2021 with 68 per cent of new listings occurring in the final two quarters. Activity was driven by the availability of capital underpinned by attractive investment fundamentals, further supported by strong levels of sentiment and a buoyant share market.
During the course of the year, 87 per cent of IPOs met or exceeded their capital raising goals, an increase on the five-year average of 83 per cent. In addition, IPOs on average experienced strong share price performance subsequent to listing, recording an average first day share price increase of 20 per cent. In total, 115 companies (60 per cent of all IPOs) ended their first day above their listing price.
The year also saw a significant increase in the number of small cap listings, with 145 companies with a market cap of less than $100 million entering the market. This is almost double the five-year average.
Small cap listings represented 76 per cent of new market entrants for 2021, and raised a total of $1.38 billion (11 per cent of total funds raised during the year). The most active segment for the year was the $10-25 million bracket, with 70 IPOs making up 48 per cent of all small cap listings. The small cap sector was dominated by the Materials sector which made up 68 per cent of listings in this bracket, and was the strongest performing industry sector overall, with 107 new entrants during 2021 (compared to 24 in 2020).
Looking ahead, the pipeline continues to look strong for 2022. At the end of 2021, there were 27 companies which had applied for listing to the ASX, a significant increase from the 14 companies at the same time the previous year. These companies are hoping to raise $250.4 million.
This year’s report, authored by Marcus Ohm, provides a detailed summary of IPO activity within Australia for 2021. 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 2022.