IPO Wrap: 2021 saw record breaking IPOs, but experts warn of headwinds in 2022

The global IPO market has had a record breaking 2021, but experts are warning of headwinds in 2022.

This year, global IPO volumes rose 64%, and Q4 2021 was the most active since the Q4 of 2007.

According to a report from EY Global IPO Trends report, Europe, the Middle East, India and African exchanges produced the highest growth, seeing a 158% increase by number of IPOs.

Globally, the technology sector saw the highest number of IPOs (611) for the sixth consecutive quarter (since Q3 2020), and raised the highest proceeds (US$147.5b).

But Paul Go, EY’s Global IPO Leader, says the winds may be shifting as a result of the new Omicron variant.

“The winds shifted with the surfacing of the COVID-19 omicron variant, continuing geopolitical tensions, slowing IPO activity and increased market volatility,” Go said.

“Whether or not IPO-bound companies press pause or forge ahead in 2022, they will need to satisfy investor demands for resilient growth strategies and well-articulated environmental, social and governance (ESG) plans.”

On the ASX, the story hasn’t been much different with nine new stocks coming on to the bourse in the last week alone.

However, only four of those are currently trading above their IPO price.

Qualitas Limited (ASX:QAL) operates in the alternative real estate investment management sector on behalf of fund investors.

It raised $335m at $2.50 and is currently trading up 4% at $2.60.

Proceeds from the offer will be used primarily to fund co-investments to grow funds under management (FUM), currently at $4.2 billion across its debt and equity funds  mandates.

“Our priority is – and will remain – investing our capital in well-considered and risk-mitigated real estate opportunities in both debt and equity that will deliver returns through market cycles,” co-founder Andrew Schwartz said.

SHAPE Australia (ASX:SHA), a specialist building contractor and construction manager, raised $2m at $1.96.

The company has projects from commercial, hospitality and retail through to education and healthcare.

“Over our 32 years, SHAPE has grown to one of Australia’s largest private companies in the construction services industry,” says CEO Peter Marix-Evans

“This IPO listing will not only provide a facility to our existing shareholders to trade their holdings, but also facilitate opportunities to expand our business model across new and current service offerings and expanded career paths.”

XPON Technologies (ASX:XPN) provides corporate and mid-tier enterprises with cloud-based marketing technology solutions.

CEO Matt Forman said XPON is “uniquely positioned at the intersection of converging trends in data privacy and marketing technology”.

“Because of our deep AdTech and MarTech expertise, we’ve been able to build machine learning and AI-powered solutions that meet marketers wherever they are on the path to modernisation,” he said.

Video technology company BirdDog Technology (ASX:BDT) offers solutions that enhance the quality, speed and flexibility of video allowing high-definition video to be delivered with low-latency and across existing computer networks.

It has a signature software platform as well as cameras, camera accessories and smart display modules.

BirdDog was founded in Melbourne in 2016 and told prospective ASX shareholders in its IPO prospectus it has seen heavy demand of late thanks to people working from home and relying on virtual meetings.

In FY21 it recorded revenues of $38.2 million and earnings of $2.4 million.

It raised $33m at 65c per share.

Upcoming ASX IPOs this week

Mining stocks will dominate the IPO market going into the New Year break.

The one non-mining company is Atturra, a tech firm that designs, implements and maintains IT systems.

Attturra has grown its revenues by over 20% in the last three years, and its client list is pretty impressive with the likes of Ampol, Lion Nathan, and the Department of Defence and Department of Agriculture.