2021 IPO Watch Australia Report

IPO market shakes off COVID-19 blues to finish 2020 strongly

Despite the widespread economic impact of COVID-19, the Australian IPO market rebounded strongly in the second half of 2020 with a resurgence in market listings.

There were 74 new listings on the ASX in 2020, which is an increase of 12 on the year prior. Notably, the second half of 2020 recorded 84 per cent of the year’s total listings.

The strong end to the year reflects the resilience of Australia’s economy amid particularly tough business conditions.

Total funds raised for the year were $4.98 billion, a significant reduction on previous years with $6.91 billion and $8.44 billion raised in 2019 and 2018 respectively. The fall in volumes impacted on total funds raised with the first half of the year total of $132 million representing just 3 per cent of the total funds raised for the year.

Listings of large cap stocks – those in excess of $100 million market capitalisation – performed well with 31 new listings which was comparable to the previous year and above the five-year average of 29 listings. On average, large cap listings raised $148.65 million. At the top end, there were three new entrants with a market capitalisation on listing in excess of $1 billion compared to just the one in 2019.

A total of 15 different industry sectors recorded listings in 2020, with Materials companies contributing 32 per cent of all listings and Retailing also well represented with seven new listings, up from one in 2019.

Share price performance was positive overall for new entrants following challenging early market conditions and many also recording strong year-end gains. A total of 49 of the 74 new entrants during 2020 posted a year-end gain, with the average gain being 34 per cent.

After a strong end to the year, it also looks set to continue throughout 2021, with a healthy pipeline of new market entrants scheduled to list. Currently, 14 companies have applied for listing at year-end, representing a small increase on the comparable period last year.

It is telling that in a post-COVID-19 recovery environment, the pipeline is quite good compared to previous years, and this reflects the strength of Australia’s economic fundamentals and positive investor sentiment.

This year’s report, authored by Marcus Ohm, provides a detailed summary of IPO activity within Australia for 2020. 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 2021.

Listen to a recording of the presentation to the media by Marcus Ohm.

This year’s report also features articles authored by Jude Lau and Nicholas Guest.

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