Business adviser HLB Mann Judd has compiled some useful equity market data, with a report on Australian IPO activity in the first six months of the year. Of interest to investors is the information about which IPOs were well supported.
An oversubscribed initial public offering is more likely to be supported after its listing than one that struggled to achieve its subscription target.
Close to three-quarters (74 per cent) of the 57 companies that completed IPOs and listed on the Australian Securities Exchange in the first six months of the year met their subscription targets, raising an average of 83 per cent of the funds sought.
This was down on last year, when 83 per cent of companies met their targets. In fact, last year the market was oversubscribed on average, with companies raising 102 per cent of funds sought.
The best performing market capitalisation ranges were $10 million to $25 million, $50 million to $75 million and $100 million plus. On average, companies in each of those brackets reached 100 per cent of subscription targets.
All four companies in the $50 million to $75 million bracket met their target.
The smallest companies – those in the $0 to $10 million range – raised 95 per cent of funds sought, on average.
Companies in the $75 million to $100 million range only achieved 37 per cent of their targets, on average.
A number of industry sectors achieved full subscriptions, including software and services (which had five listings), healthcare equipment and services (four listings) and pharmaceutical and life sciences (four listings).
Materials listings were the most numerous but only 10 of the 15 companies managed to reach full subscription.
Three industries, each with one entrant, failed to met their subscription targets: food and staples retailing; telecommunications services; and media.
HLB Mann Judd says the last time more than 50 companies listed in the first half of the year was in 2011, when there were 58 in the six months.
A significant number this year were from the small cap sector (less than $100 million market cap at listing). There were only eight large cap listing.
No IPO exceeded $1 billion in the half and only one exceeded $500 million. This led to a reduction in the amount raised.