Highlights
- In the first half of 2022, 59 IPOs got listed on the ASX.
- One hundred and thirty IPOs were listed on the ASX in the second half of last year.
- The scenario is expected to remain weak in the second half of the year.
The Australian initial public offering (IPO) market is currently battling challenges in the form of rising inflation, interest rates and geopolitical tensions. While the domestic IPO market began 2022 on a decent note, the earlier mentioned factors negatively impacted market sentiment, creating hurdles in raising capital.
In the first half of the year, 59 IPOs got listed on the ASX, against 61 in the same period of 2021. One hundred and thirty IPOs were listed on the ASX in the second half of last year. The scenario is expected to remain weak in the second half of the year.
“At this stage, it seems unlikely that the IPO market in 2022 will come anywhere near the amounts raised or the number of listings that we saw last year,” said Marcus Ohm, the author of the recently released HLB Mann Judd IPO Watch Australia mid-year report.
On this note, here we discuss eight IPOs which are scheduled to be listed on the ASX in September (as of 19 August 2022).
Aeramentum Resources Ltd (ASX:AEN) The IPO of mineral explorer Aeramentum Resources is scheduled to be listed on the ASX on 1 September 2022. The company raised AU$7 million at an issue price of AU$0.20 per share. Novus Capital Ltd is the lead manager of the offering.
Australia Sunny Glass Group Ltd (ASX:AG1) Australia Sunny Glass produces and supplies glass. The IPO is set to be listed on the ASX on 21 September (12 PM AEST). Australia Sunny Glass earlier raised AU$7.5 million at an issue price of AU$0.35 per share. Townshend Capital Pty Ltd is its underwriter and lead manager.
Bridge Saas Ltd (ASX:BGE) Bridge Saas provides Software-as-a-Service- (SaaS) based Customer Relationship Management (CRM) and workflow solutions. The public offering would list on 6 September at 11 AM (AEST). The total capital raised stands at AU$4.5 million at AU$0.20 per share. MOLO Capital and Pulse Markets Pty Ltd are the joint lead managers.
Critical Minerals Group Ltd (ASX:CMG) Critical Minerals Group deals in critical minerals needed for electric vehicles, energy storage and renewable energy. The IPO would list on 27 September. Earlier, Critical Minerals raised AU$5 million at an issue price of AU$0.20 per share. Vested Equities Pty Ltd and Harbury Advisors Pty Ltd are the joint lead managers.
H & G High Conviction Ltd (ASX:HCF) H&G High Conviction is an investment company with a focus on risk-adjusted returns. The IPO is set to be listed on 22 September at 10:30 AM (AEST). The company raised AU$30 million. Morgans Corporate Ltd is the joint lead manager.
Nightingale Intelligent Systems Inc (ASX:NGL) Nightingale Intelligent Systems develops and sells Unmanned Aerial Vehicles (UAVs) for commercial applications. According to the ASX, the IPO’s tentative listing date is 16 September at 10.30 AM (AEST). The total capital raised stands at AU$10 million at AU$0.35 per share. Novus Capital Ltd is the IPO’s joint lead manager.
Octava Minerals Ltd (ASX:OCT) Mineral explorer Octava Minerals is engaged in lithium and gold discoveries. According to the latest data available on the ASX, Octava Minerals’ IPO is scheduled to be listed on the exchange on 14 September. The mining firm had come up with an AU$6-million IPO at an issue price of AU$0.20. Octava Minerals had appointed Bell Potter Securities Ltd as its lead manager.
Terra Uranium Ltd (ASX:T92) Terra Uranium is a mineral exploration and mining firm. The public offering would list on 7 September at 11 AM (AEST). The mining firm had come up with an AU$7.5 million IPO at an issue price of AU$0.20. Terra Uranium had appointed Peak Asset Management Pty Ltd as its lead manager.
Buying IPO
Investors can become shareholders of a company and own rights in it by investing in its IPO. They also become eligible to get dividends and bonus shares depending on earnings of the firm. Thus, investors can lap up shares in companies with strong fundamentals at a reasonable price through the IPO route. Otherwise, they would be forced to purchase shares of the same company at elevated prices after the company later grows in value.
Things to consider while buying an IPO
Investors should always read in detail the preliminary prospectus issued by the company going public.
The prospectus, referred to as ‘red herring’, includes specific information available on a publicly traded company. Investors can easily find the firm’s financials in the prospectus. They can gain a fair enough idea about the quality, credibility, and stability of promoters from the document. According to experts, a company with a higher valuation should generally be avoided.
Investors can ask these three questions before buying an IPO:
- What can be the expected reasons for a business to grow as fast as expected while buying its IPO?
- What are the unique attributes of the business?
- Why are other companies not entering the same sector?
Should you buy an oversubscribed IPO?
The level of subscription by qualified institutional investors provides an idea to investors about the quality and pricing of an IPO. A low subscription level indicates that institutional buyers don’t see the IPO as an attractive proposition, while a high level of oversubscription points towards huge retail subscription and very little allotment – making the entire exercise pointless.
According to experts, investors should not go after shares of a firm following its strong listing on the exchange as listing gains on account of significant oversubscription may erode after investors book profits within a week of listing. It can lead to a dip in the share price of the company.
Meanwhile, several IPOs are in the pipeline to be listed in coming months in the second half of 2022, investors should conduct detailed research before putting their hard-earned money into them. The preliminary prospectus issued by firms provides a good idea about fundamentals of the company and what can be expected of it going ahead.
Note:
- ASX codes are proposed only.
- Listing dates are proposed dates for the first quotation of securities set out in the entity's prospectus or information memorandum and are subject to change without notice.
- Listing dates are expected dates for the first quotation of securities set by the ASX after the completion of admission procedures. These could change without any notice.