IPO Watch: $2.6b lender Latitude Financial lists on the ASX; gains another 15pc on debut
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There’s another lending stock on the ASX – Latitude Financial (ASX:LFS) . But this one is $2.6 billion, 2021’s largest IPO and it grew even bigger on debut.
Latitude offers several lines of credit including personal loans and credit cards as well as insurance and digital payment products. It claims to have 2.77 million customer accounts and over 3,400 merchant customers.
Having raised $200 million at $2.60 per share and with an anticipated market cap of $2.6 billion, Latitude Financial is 2021’s most successful ASX IPO as well as Australia’s third largest consumer lender.
The company is 66.4 per cent owned by private equity group KKR, Deutsche Bank and Varde Partners, who founded the company in 2015. It’s run by former Australian Post boss Ahmed Fahour. A further 10 per cent is owned by Japanese bank Shinsei which only bought in last month.
It comes after aborting previous attempts to join the bourse in 2018 and 2019 in which it sought several times to raise the $200 million it pulled this time and facilitate a sell-down from existing investors.
Latitude Financial shares commenced trading at 12pm and rose 15 per cent to $2.99 before settling for the afternoon around the $2.82 mark.
Having completed its IPO Latitude Financial is eyeing off further growth opportunities and investments in its digital platforms.
It has often been put into the BNPL basket with its LatitudePay product which offers interest free repayment plans – making revenue off late fees and merchant service fees.
But it has attempted to distance itself from its peers by claiming to conduct more credit checks and service higher quality customers.
The company claims that 52 per cent of customers are homeowners, 70 per cent are full time employed and 94 per cent are above 25.
It also told the Australian Financial Review it rejected nearly two-thirds of potential customers.