IPO Watch: The pipeline for new listings has ‘stalled’ and needs a kickstart
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Another week, another couple of dropped IPOs.
AXS Group and Koligo Therapeutics have ditched their plans to list on the ASX after facing difficulties in raising cash.
In mid-April US biotech Koligo had to make some radical changes to its IPO offer.
The company dropped its pre-IPO valuation by $5m, to $10m, at the request of institutions which didn’t want to buy in at that level. Its business is therapies for patients with chronic pancreatitis and Type 1 diabetes.
Fintech AXS Group, meanwhile, was forced to halve the size of its IPO to $3.5m and delay its planned listing several times.
Liquidity has tightened up and as a result IPOs have become harder for the smaller players, according to Hedley Widdup, executive director at fund manager Lion Selection Group
“I’d say the IPO pipeline is a little bit stalled as a result of what we’ve seen over the last little while and it needs an impetus to get going again,” he told Stockhead.
“You’d need to see a fair uptick I think in funding the junior companies and those people with IPOs in preparation feel like it’s worth getting started again.”
Cheer up … it’s not all doom and gloom. Here’s what might do well in an IPO.
On the resources front, exploration success near the majors is usually a good starting point for a successful IPO.
“Winu was a good one. So if someone was in that part of the world with an unlisted company with a substantial amount of ground there I suspect that would be an IPO that would get away,” Widdup said.
“The Gawler Craton is another one — BHP had that success. Victorian gold, everyone is looking for the new Fosterville.
“It’s probably a bit late for watermelon shaped nuggets in the Pilbara now, but that sort of theme where someone comes up with something that grabs the market’s attention.”
Resources floats are a bit thin at the moment, with Gold Tiger Resources and Trigg Mining the only two still in the running to make it onto the ASX.
Backdoor listings seem to be the preferred way of breaking onto the ASX at the moment.
Private Colombian gold hunter Andes Resources has cosied up to ASX-listed Metminco (ASX:MNC) in its ambitions to break onto the local bourse.
It is the third private junior explorer to attempt a backdoor listing this year.
Gold explorer Carnaby Resources had also been planning an IPO, but changed tack and in March this year announced it would instead be tying the knot with already listed Berkut Minerals (ASX:BMT).
Private manganese explorer Rolek Resources also attempted a backdoor listing last year and this year through the shell of Shaw River Manganese (ASX:SRR), but in late March revealed it couldn’t raise the $5m it needed to get back onto the ASX.
The cannabis sector still seems hopeful though, with New Zealand’s Cannasouth the next pot stock looking to debut on the New Zealand Stock Exchange — the first medicinal cannabis company to do so.
Cannasouth is researching the medically beneficial attributes of cannabinoid compounds such as cannabidiol (CBD) and tetrahydrocannabinol (THC).
The company has secured two controlled drug import licences to import dried flower for research and provide initial cultivars for its growing facility.
Cannasouth is hoping to raise NZ$5m ($4.7m) to NZ$10m ($9.5m) via the issue of shares at 50c apiece.
The company is aiming for a June 19 debut on the NZ Exchange.
Here’s a list of upcoming ASX floats:
Swipe or scroll for full table
|Company||ASX code||IPO status||Focus||Fund raising||Issue price|
|AltoStratos||ATO||Withdrawn||Supply chain delivery technology||$16-$25m||40c|
|Australian Family Lawyers||AFL||Offer closes April 29; Listing set for May 10||Law firm||$4-$6.5m||20c|
|Australian Industrial Minerals||AAM||Withdrawn||Industrial minerals||$5m||25c|
|Australian Nutrition & Sports||AN1||Was due to list Apr 3; ASIC has issued an interim stop notice||Dairy formula||$5-$8m||20c|
|AXS Group||AXS||Withdrawn||Software provider to the finance, insurance and funds sector||$7m||25c|
|Expose Resources||EXX||Listing date extended to April 10||Gold||$4.5m||20c|
|Frugl||Pre-IPO funding; planning listing||Grocery price comparison||-||-|
|Gold Tiger Resources||GRA||Offer closing May 10; Listing planned for May 22||Gold||$4-$5m||20c|
|Jobstore Group||JOB||Was due to list Dec 5||AI-powered recruitment||$6.6-8m||20c|
|Koligo Therapeutics||KOL||Withdrawn||Regenerative medicine||$6-$7m||20c|
|Melior Resources||Seeking ASX-listing in 2019||Mineral sands||$5m|
|PKS Holdings||PKS||Offer closes May 27; Listing set for June 6||Healthcare technology||$21.5m||20c|
|Powerwrap||PWL||Offer closes May 3; Due to list May 23||Investment software platform||$17.4m||35c|
|Prospa Group||PGL||Offer closes May 31; Due to list June 11||Small business lending||$109.6m||$3.78|
|Renergen||RLT||Due to list May 21||Helium||$5-10m||80c|
|Trigg Mining||TMG||Due to list June 28||Potash||$4.5m||20c|
|Tubi Limited||2BE||Offer closing May 27; Due to list June 14||Polyethylene pipe manufacturer||$5.76m||20c|
|Victory Offices||VOL||Offer closing May 31; Due to list June 14||Serviced offices||$30m||$2|
|Viva Leisure||VVA||Offer opens May 13; Due to list June 7||Health club operator||$20m||$1|
Only a handful of companies that made their debut on the ASX in the past year have witnessed share price appreciation.
Nearly 64 per cent of ASX debutantes have wiped off between 4 per cent and 80 per cent of their value since listing.
Buy now, pay later stock Splitit (ASX:SPT) is still the lead gainer, trading 345 per cent higher than its IPO price of 20c.
Wireless internet provider Uniti Wireless (ASX:UWL) is not far behind with a 280 per cent rally since listing to 95c on Tuesday.
Just five of around 21 mining companies that floated in the past year have added value, but they are at the bottom of the leaders’ list with gains of between 5 per cent and 20 per cent.
Here’s a list of IPO performances over the past year:
Swipe or scroll for full table
|Listing Date||ASX Code||Company||IPO Price||Price Intra-day May 21||% Change|
|09/21/2018||AGH||Althea Group Holdings||0.2||0.625||2.125|
|07/18/2018||KTD||Keytone Dairy Corp||0.2||0.5||1.5|
|12/13/2018||EMV||EMvision Medical Devices||0.25||0.405||0.62|
|05/07/2019||MRZ||Mont Royal Resources||0.2||0.21||0.05|
|11/30/2018||RDC||Redcape Hotel Group||1.13||1.08||-0.0442477876106|
|10/12/2018||TGF||Tribeca Global Natural Resources||2.5||2.29||-0.084|
|07/13/2018||VEA||Viva Energy Group||2.5||2.18||-0.128|
|10/23/2018||CRN||Coronado Global Resources||4||3.23||-0.1925|
|02/19/2019||CLB||Candy Club Holdings||0.2||0.12||-0.4|
|07/06/2018||WOA||Wide Open Agriculture||0.2||0.115||-0.425|
|10/02/2018||SGI||Stealth Global Holdings||0.2||0.096||-0.52|
|11/08/2018||GSM||Golden State Mining||0.2||0.07||-0.65|