IPO Watch: DDH1 is the latest mineral drilling company to list on the ASX, but shares fell 20 per cent
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Mineral drilling contractor DDH1 Limited (ASX:DDH) has become the latest to list on the ASX but shares have dropped on its ASX debut.
The company raised $150 million at $1.10 per share making it one of the biggest IPOs in 2021; and, according to DDH1, one of the largest by a WA-based firm.
Unfortunately shares opened downwards – at 2pm (AEDT) they were trading at 87.5 cents which is 20 per cent lower than the offer price.
It was a stark contrast to the last drilling stock to list on the ASX – Dynamic Drill & Blast (ASX:DDB) – which more than doubled on its debut last August and has held firm ever since.
In the past 12 months drilling services companies have seen strong demand for their services in conjunction with the commodities boom.
“There is growing demand in the Australian mineral drilling sector for DDH1 services because of increased exploration, development and production spending by minerals exploration and mining companies,” said DDH1 CEO Sy Van Dyk.
“As an ASX listed company with a strong balance sheet, a committed shareholder base, a disciplined approach to growth and access to capital markets, DDH1 is well positioned to pursue its growth strategy.”
It employs 930 people and operates a total of 96 drill rigs across three different brands.
The company is forecasting FY21 revenue of $280.2 million and an after-tax profit of $30 million and has told shareholders it intends to pay a dividend for the current financial year.
It is 33.3 per cent owned by non-executive director Murray Pollock and his fellow co-founders and another 22.1 per cent is owned by funds managed by US investor Oaktree Capital Management.