Australia’s IPO market had a strong start to the calendar year however the past few months has seen the environment for new listings become significantly more challenging.
The latest HLB Mann Judd IPO Watch Australia Mid-Year Report analyses IPO activity over the 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 reviewing the pipeline for the remainder of 2022.
The report shows a slow-down in the IPO market in the second quarter of 2022, reflecting the broader market, with factors such as inflationary fears, geopolitical instability and interest rate rises affecting markets worldwide.
Macroeconomic and capital market conditions will continue to impact the IPO market in the second half of 2022. The pipeline at the end of June 2022 reflects uncertain market conditions with only 15 floats – worth $121 million – preparing to list. This contrasts to the 43 proposed listings at the end of June 2021 which sought to raise a combined $1.25 billion.
There were 59 new listings in the first six months of 2022 compared to 61 in the same period in 2021, and 130 in the second half of 2021.
IPOs in 2022 have raised just $790 million compared to $2.9 billion in the first six months of 2021. Overall, a total of $12.33 billion was raised in 2021. Total amounts raised have been particularly impacted by the lack of large cap listings, with only five new large cap entrants in this segment of the market compared to 13 listings at the end of June 2021.
Materials has been the dominant sector year to date, representing a total of 44 out of 59 new entrants. Gold projects continued to prevail, with 21 of the Materials listings holding gold projects. In addition, multiple listings held projects with a focus on lithium, nickel and cobalt prospects, reflecting the increasing global demand for battery metals.
Western Australia had led the IPO market so far during 2022, with 71 per cent of new listings coming from the state, reflecting the strength of the Materials sector in Western Australia.
*All figures quoted correct as at 19 July 2022.
This article was first published in the Spring 2022 issue of Financial Times.