Mining companies continue to dominate Australia’s deflated initial public offerings (IPO), however 2025 could maintain the trend of seeing the number of new listings proportionately reduced.
There are only three upcoming floats flagged on the Australian Securities Exchange (ASX) website as of today (23 January) and two of them are mining companies – Siguiri Gold Corp (7 March) and Burrendong Minerals (31 March). Southern Cross Gold Consolidated (ASX:SX2) listed on 16 January.
Last year’s 29 ASX floats were the lowest number since the inaugural IPO Watch Australia report in 2004 and down 9% from the 32 listings in 2023 which at the time was the worst year in nearly 20 years.
Released today, the HLB Mann Judd 2025 IPO Watch Australia Report highlights how the poor listing volumes reflect another challenging year for the market, with significant macro and political factors at play globally. Compounding this for 2025 is the upcoming policy uncertainties in relation to recently inaugurated US President Donald Trump.
According to HLB Mann Judd Partner and author of the IPO report Marcus Ohm, the materials sector has historically recorded the most new floats, and while that was still the case in 2024 with 13 new listings accounting for 45% of the total, proportionately this has reduced from 2023 (72% of listings) and the five-year average of 56%.
“This reflects unsupportive market conditions for junior exploration listings resulting in a marked decrease in the number of successful materials listings. Small cap materials sector listings (12 of 13) raised an average of $9.37 million and recorded a first day average gain of 16% which fell slightly to 10% at year end,” Ohm notes in the report.
The materials sector includes companies that explore or produce commodities and related industries such as mining, chemical companies that produce fertilisers and industrial gases, as well as those that make construction materials such as bricks and steel. It also encompasses timber companies, paper mills, and those in the plastics, containers, and other packaging space.
Looking ahead, 2025 could continue seeing declines in IPOs after years of market decline.
The slowest year for global initial public offering activity was 2023, which had the least number of market debuts since 2019, as reported by S&P Global Market Intelligence. The 1,429 floats launched globally in 2023 was nearly 16% down from 2022 and just over 40% of the amount launched in 2021.
Is 2025 on track to continue this trend?
Deflated volumes, inflated raisings
Despite the low IPO volume in Australia, the total funds raised last year surged 387% to $4.1 billion, compared to $847 million in 2023. Ten industry sectors recorded new market entrants last year – an increase from 2023 where only seven sectors were represented.
These figures differ slightly from reported Bloomberg data, which states $3.5 billion was raised during 2024 with IPOs returning an average of just 4.78%.
The inflated value in funds raised was largely due to the 11 large cap listings (those with a market capitalisation above $100 million), which contributed 96% of the total funds raised. Three of the 11 large cap listings in the year had market caps in excess of $1 billion on listing and raised $2.7 billion between them.
Across the 18 small cap IPOs, total funds raised was $166 million (2023: $200 million) with the average per listing of $9.2 million. Ohm notes this is 15% higher than the average small cap raise across 25 listings in 2023.
‘Despite the low IPO volume in Australia, the total funds raised last year surged 387% to $4.1 billion, compared to $847 million in 2023’
Interestingly, just 19 of last year’s floats managed to achieve their maximum target amount (66%), a considerable drop from 2023 when 91% completed fully subscribed listings. Additionally, a number of late-stage IPOs which had proposed listing dates were withdrawn in 2024.
According to the report, new listings enjoyed an average 12% day one gain compared to issue price, which remained consistent at year-end (12% gain).
Comparatively, the ASX All Ordinaries Index increased 8% across 2024. Sixteen of the 29 new floats recorded a first day gain, which fell to 11 at year-end. Only 10 companies improved their respective day one result at year-end.
History repeats?
As is often the case, Q4 2024 was the best performing quarter in which $3.05 billion in funds were raised, a significant increase from the September quarter ($109.3 million).
However, there were just 370 IPOs launched globally in the fourth quarter of 2023, down from 417 in the fourth quarter of 2022 and 921 in the same period of 2021, according to S&P Global Market Intelligence data. That was the slowest fourth quarter since 2012, when there were 285 IPOs worldwide.
The challenging economic environment continued to weigh heavily on the market for IPOs in H1 2024. Higher interest rates and persistent inflation restricted listing activity, according to HLB Mann Judd’s IPO Watch Australia Mid-Year Report.
There were just 13 floats in the first six months to 30 June – one fewer than in the same period last year. This follows a lacklustre year for listings in 2023, when the total funds raised on the ASX was $847 million – the first time since 2012 where the total raised did not exceed $1 billion.
During H1 2024, six industry sectors contributed new listings, up from three sectors in the H1 2023. Materials listings dominated, comprising seven of the 13 in the period.
Metals Acquisition (ASX:MAC) was the first big listing of the year in February 2024, raising $325 million. That was followed by the June float of Mexican-themed restaurant chain Guzman y Gomez Limited (ASX GYG), when $335 million was raised from investors.
According to Ohm, the average first day gain across all new IPOs was 32% for H1 2024. Comparatively, the average first day gain for the full 12 months of 2023 was just 6%.
“By the end of June 2024, the average increase over the listing price was 13 per cent, compared to an average year-end loss in 2023 of 10%,” Ohm says.
“New IPOs performed well relative to the wider share market, with the ASX All Ordinaries closing just above 8,013 at the end of the period, representing a 2% increase for the period. IPOs performed much better, indicating a positive investor appetite for new listings.”
Small caps raised $90.5 million across 10 listings during H1 2024, contributing just 11% of the total funds raised. In contrast the first half of 2023 saw small caps contribute 67% of total funds raised.
The average amount raised per IPO by small caps increased marginally to $9.05 million in 2024 compared to the average of $8.3 million H1 2023.
In 2023, the IPO market experienced a marked deterioration with just 32 listings for the year. This was 63% lower than the 87 floats in 2022 and 83% lower than the record-breaking 191 IPOs in 2021.
In fact, 2023 was then the lowest number of ASX listings since HLB Mann Judd published its first annual IPO Watch Australia Report in 2004 and 2024 was worse.
The average funds raised per listing in 2023 was $26.5 million – a 115% increase in comparison to 2022 when the average funds raised per IPO was $12.34 million. However, that increase was largely attributable to the $402 million chemical distribution company Redox (ASX:RDX) raised, which accounted for 47% of total funds raised that year. I
It was also the only IPO in 2023 to have a market capitalisation over $1 billion at listing. Today the company’s market value is $2.24 billion.
Write to Adam Orlando at Mining.com.au
Images: iStock & HLB Mann Judd
