The firm returning 200% since IPO
After an earlier downturn in listings, initial public offerings (IPOs) have picked up in the second half of the year with a total of 56 expected by year end, with one IPO returning 200% since its listing.
There were only 12 companies which listed on the Australian Securities Exchange (ASX) during the first half of 2020 but there had been double that number since 1 July to the end of October with 24 companies listing during the period.
There were a further 20 expected to list by the end of the year which would take the 2020 total to 56, not far off the 63 companies listed in 2019.
The companies which listed in the first half of the year were Nyrada Inc, Happy Valley Nutrition, Cosol, Cobre, Emerald Clinics, Thedocyard, Castile Resources, Little Green Pharma, Kaiser Reef, Atomo Diagnostics, AML3D, and Intelicare.
Since 1 July to 10 November, the best-performing stock over the period was AML3D, which returned 200%, significantly better than the second-best performer, Castile Resources, which returned 77%.
When factoring when it had listed, AML3D, a 3D metal printing business founded in 2014, had returned 200% since its 20 April listing compared to returns of 20% by the ASX 200.
However, there were three companies which had both lost money and underperformed the ASX 200. These were Cobre which lost 11%, Intelicare which lost 22.7% and Happy Valley which lost 28.5%, compared to positive returns by the ASX 200 of 7.8%.
According to Vanguard, less than 20% of Australian IPOs this year were trading above their opening day closing price and more than 40% were trading below their initial offer price. Others had failed to outpace returns by the wider index.
It was believed the IPO boom was being driven by speculators who were seeking short-term profits in the face of low interest rates. Rates were cut by the Reserve Bank of Australia to 0.1% last week which meant cash returns were negative after inflation.
This was evidenced by the number of investors who were buying into companies during the initial offer process and then selling out very quickly once they had listed.
AUTHOR
Laura Dew
Recommended for you
The merger with L1 Capital will “inject new life” into Platinum, Morningstar believes, but is unlikely to boost Platinum’s declining funds under management.
More than half of the top 20 most popular shares bought by advised investors during the first half of 2025 were ETFs, according to AUSIEX data.
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.
