A total of 191 initial public offerings (IPOs) took place in 2021, raising a collective $12.33 billion according to the latest HLB Mann Judd IPO Watch Australia Report.
This was the highest number of new floats in the past decade and exceeded the number of listings in 2019 (74) and 2020 (62) combined.
IPO activity accelerated in the latter half of the year according to HLB Mann Judd Perth partner and report author Marcus Ohm, with 68 per cent of new listings occurring in the last two quarters.
“Activity was driven by the availability of capital underpinned by attractive investment fundamentals, sustained by strong levels of sentiment and a buoyant share market,” he said.
The number of companies listing with a market cap over $1 billion increased to eight while the three largest IPOs raised a combined $3.34 billion or 27 per cent of the total funds raised.
Significant increases were also recorded at the other end of the market as 145 companies with a market cap of less than $100 million listed during the year, nearly double the five-year average, to raise a total of $1.38 billion.
Eighty-seven per cent of IPOs met or exceeded their capital raising goals, above the five-year average of 83 per cent.
A total of 115 companies or 60 per cent of all IPOs ended their first day above their listing price with an average first day share price increase of 20 per cent.
“This strong performance was maintained at the end of the year with an average increase in share price of 17 per cent across all IPOs,” said Mr Ohm.
“However, these averages hide a number of individual outliers, with 50 companies recording a year end gain of 20 per cent or more, and 57 a year-end loss of 20 per cent or more.”
Mr Ohm said the outlook for IPOs in 2022 remained strong with 27 companies applying to list on the ASX as of the end of last year compared to 14 at the end of 2020.
“The materials sector looks set to continue dominating in early 2022, with 17 of these proposed listings, and 45 per cent of funds sought, coming from this sector, and over three-quarters of these relate to gold projects,” he said.
“Overall, the numbers suggest IPO activity will remain strong in the first part of 2022.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
